Appeals of MMS Orders

SUMMARY: OHA and MMS are amending their rules governing the appeal of

orders from MMS's Royalty Management Program and MMS's Offshore

Minerals Management. This rule makes final parts of the proposed rule

published on January 12, 1999. The rule also: implements certain

provisions of the Federal Oil and Gas Royalty Simplification and

Fairness Act of 1996 governing how appellants in royalty appeals may

demonstrate financial solvency instead of posting a surety, and

provides for new regulations to collect processing fees in appeals from

Offshore Minerals Management orders.

EFFECTIVE DATES: Effective on May 13, 1999, except that the amended

provisions of 30 CFR parts 208, 241, and 243 will be effective June 14,

1999.

FOR FURTHER INFORMATION CONTACT: David S. Guzy, Chief, Rules and

Publications Staff, telephone (303) 231-3432, FAX (303) 231-3385, e-

Mail David.G[email protected].

SUPPLEMENTARY INFORMATION: The rule provides that 30 CFR parts 250 and

290 and 43 CFR subpart J will be effective immediately upon

publication. Under the Administrative Procedure Act at 5 U.S.C. 553(d),

an agency must find good cause to make a substantive rule effective

sooner than 30 days after the date of publication. There are certain

administrative appeals pending before the Department in which, under 30

U.S.C. 1724(h)(1), the Secretary must issue a final decision before May

13, 1999, which is less than 30 days after publication of this rule.

(May 13, 1999, is 33 months after the date of enactment of the Federal

Oil and Gas Royalty Simplification and Fairness Act of 1996, which

enacted 30 U.S.C. 1724(h).) If there is no final departmental decision

by that date, 30 U.S.C. 1724(h)(2) imposes a statutory rule of decision

in those cases. Title 43 CFR part 4 subpart J resolves various issues

involved in implementing the requirements of 30 U.S.C. 1724(h)(1) and

(2). Its provisions apply to those cases in which the Secretary must

issue a final decision by May 13, 1999, and the effect of the statutory

rule of decision if the Department does not issue a final decision by

that deadline. Title 30 CFR parts 250 and 290 contain provisions

regarding appeals of orders that are part of the integrated changes to

the orders and appeals scheme that includes the new 43 CFR part 4

subpart J. The Department therefore finds that good cause exists to

make these provisions effective immediately upon publication. The

remainder of this rule will be effective 30 days after publication.

I. Background

In May 1994, MMS began a comprehensive review of its administrative

appeals process. As part of that review, MMS held several informal

meetings with State, tribal, and industry representatives to discuss

the problems and possible solutions regarding the appeals process. The

principal problems identified included the length of the appeals

process--sometimes taking several years to resolve a case--and the

excessive costs of the process to both MMS and appellants.

In 1995, the Department of the Interior (DOI) established a Royalty

Policy Committee (RPC) under the Minerals Management Advisory Board. At

its first meeting in September 1995, the RPC established the Appeals

and Alternative Dispute Resolution (ADR) Subcommittee. The Appeals and

ADR Subcommittee was created to make recommendations to the RPC to

improve the appeals and ADR processes. Membership in the Appeals and

ADR Subcommittee included 11 representatives from industry, 5

representatives from States, and 2 representatives from Indian tribes.

The Subcommittee agreed that the principal purpose of the MMS

administrative appeals process should be the expeditious and

independent review of appeals. The RPC made a recommendation (RPC

Report) and submitted that recommendation to the Secretary of the

Interior. The primary recommendation was to change the current two-step

appeals process into a one-stage Interior Board of Land Appeals (IBLA)

administrative appeal process. On September 22, 1997, the Secretary

accepted the RPC report for consideration and proposal with some

changes and clarifications.

On August 13, 1996, the President signed into law the Federal Oil

and Gas Royalty Simplification and Fairness Act of 1996, Pub. L. 104-

185, as corrected by Pub. L. 104-200 (RSFA). RSFA amended portions of

the Federal Oil and Gas Royalty Management Act of 1982 (FOGRMA), 30

U.S.C. 1701 et seq. Before enactment of RSFA, there was no time limit

on when DOI must issue decisions in appeals of orders involving royalty

and other payments for Federal oil and gas leases. RSFA added a new

FOGRMA section 115(h), 30 U.S.C. 1724(h), governing the time frame for

DOI to process appeals of MMS orders or decisions involving royalties

and other payments due on Federal oil and gas leases. For appeals

involving Federal oil and gas leases covered by this new provision, DOI

has 33 months from the date a proceeding is commenced to complete all

levels of administrative review. If DOI does not decide the appeal

within 33 months, the appeal is deemed decided either for or against

DOI, depending on the type of order and the monetary amount at issue in

the appeal. The 33-month deadline does not apply to appeals involving

Indian leases or Federal leases for minerals other than oil and gas.

As a result of the MMS review of the appeals process and RSFA, MMS

announced a proposed rule in the Federal Register on October 28, 1996

(61 FR 55607). The proposed regulation provided for amendments to the

MMS appeals process at 30 CFR part 290. On December 31, 1997, MMS

announced that it intended to withdraw the October 28, 1996, proposed

rule when it published a revised notice of proposed rule (62 FR 68244).

Accordingly the October 28, 1996, proposed rule was withdrawn when MMS

proposed a revised appeals process on January 12, 1999 (64 FR 1930)

that included most of the RPC Report recommendations.

Two portions of the proposed rule would have implemented the RPC

recommendations. First, the new proposed 43 CFR part 4, subpart J,

would have established a new procedure for appeals of royalty orders.

That section would have replaced the current regulations at 30 CFR part

290 and 43 CFR part 4, subpart E, as they relate to appeals of royalty

orders initially to the MMS Director and then to the IBLA. Second, the

new proposed 30 CFR part 242, subpart B, would have established

procedures for orders issued by MMS and delegated States. That subpart

would have incorporated certain RSFA provisions regarding orders and

orders to perform restructured accounting and for service of orders on

lessees when orders are sent to their designees. In addition, subpart C

of proposed part 242 would have established procedures for Indian

lessors to formally request that MMS

[[Page 26241]]

take actions. Finally, subpart D of part 242 would have included the

service requirements that currently are found at 30 CFR part 243.

We have decided not to go forward at this time with the entire

appeals process that we proposed on January 12, 1999, for two major

reasons. One, we received numerous negative written and oral comments

regarding the proposed process. Two, the necessity to publish before

May 13, 1999, a final rule implementing the RSFA appeals adjudication

time requirements and the associated rule of decision under 30 U.S.C.

1724(h) for cases in which there is no final Departmental decision

prevents us from conducting a thorough and reasoned review of all the

comments we received on the appeals process. One commenter suggested

that we withdraw the proposed rule, leave the current process in place,

and only publish the portions of the proposed rule necessary to

implement RSFA. Rather than withdrawing the proposed rule, we are

making final only those portions of the proposed rulemaking necessary

to implement RSFA, and the portions of the proposed rule which received

few, if any, comments. Those portions of the rule that are part of this

final rulemaking are as follows:

(1) The sections of proposed 43 CFR part 4, subpart J, necessary to

implement the 33-month time period at 30 U.S.C. 1724(h), and allow

joinder for lessees who receive notice of an order issued to their

designee as required under 30 U.S.C. 1712(a);

(2) Proposed 30 CFR part 243, regarding stays pending appeal and

bonding, and implementing 30 U.S.C. 1724(l) which allows lessees to

demonstrate financial solvency in lieu of posting a bond or other

surety instrument pending an administrative or judicial proceeding;

(3) Proposed 30 CFR part 290 regarding appeals of MMS Offshore

Minerals Management Program (OMM) orders and related changes to 30 CFR

part 250;

(4) Proposed 30 CFR part 241 regarding civil penalties authorized

by FOGRMA; and

(5) Proposed changes to definitions in 30 CFR 208.2 and to 30 CFR

208.16 regarding appeals of contracting officers' decisions by

purchasers of Federal royalty oil.

Because we are not finalizing the entire proposed rule, we will

continue to require appellants to use the appeals procedures for

royalty orders found at 30 CFR part 290 and 43 CFR part 4, subpart E,

until we can publish a final rule on the appeals process. However, for

royalty-related appeals to the MMS Director, the rules are now located

at 30 CFR part 290, subpart B. That subpart is revised to contain

appropriate headings and provisions of the proposed rule necessary to

implement RSFA. Subpart A contains the procedures in the proposed rule

for OMM appeals.

II. Comments on Proposed Rule

The proposed rulemaking provided a 60-day public comment period

which ended March 15, 1999. On February 16, 1999, DOI held a public

hearing in Houston, Texas, to receive oral comments on the proposed

rule. That public hearing was announced in the Federal Register (64 FR

3262, January 21, 1999). Those attending included representatives of

natural gas, oil, and coal producers, including representatives both of

large integrated producers and of smaller independent producers.

Participants in the public hearing had the opportunity to ask specific

questions about the proposed rule and to provide comments on the

proposed rule.

MMS received written comments from 13 commenters during the comment

period. Two additional commenters submitted late comments, which we

also accepted and considered. Thus, a total of 15 comments were

accepted for review. One of the comments was from the State of

California, 1 was from a mining association, 3 were from oil and gas

trade associations, 8 were from industry, 1 was from an Administrative

Law Judge and Attorney-Advisor, from the DOI Salt Lake City Office of

the Hearings Division, Office of Hearings and Appeals, and 1 was from a

law firm.

We reviewed and analyzed all of the comments pertaining to the

sections that are part of this final rulemaking and, in some instances,

revised the language of the final rule based on these comments. The

following is a discussion of the specific comments we received and our

response by section number.

III. Section-by-Section Analysis, 30 CFR Part 208

Comment--We received no comments on the proposed amendments to part

208.

Response--Although we received no comments regarding this part, we

made some minor changes necessary to reflect that we are not making the

entire proposed rule final at this time.

IV. Section-by-Section Analysis, 30 CFR Part 241 Civil Penalties

While the focus of the comments to this proposed rulemaking

concerned the provisions of 43 CFR part 4, subpart J, several comments

were received with reference to this part. Most of the comments concern

sections of the rule in which no substantive change is proposed--where

MMS has simply attempted to restate in plain language the rule under

which MMS has operated for approximately 15 years. All comments

received concerning this part were received from an association of oil

and gas producers. Where we received more than one comment, the

additional comments came from an individual oil and gas producer.

Section 241.50 What Definitions Apply to This Subpart?

Comments--We received two comments, which noted that the proposed

rule has not defined ``violation.'' Specifically they inquired whether,

for example, when a company fails to report, is each line that should

have been reported a violation or is it one violation for the entire

report?

Response--MMS has operated under the current regulations for 15

years without a regulatory definition of violation. Any attempt to

define the term to meet all possible circumstances would require an

impractically exhaustive list. Violations could be any failure to

comply with statutes, rules, lease terms or orders.

In response to the specific question asking whether each line would

be a separate violation, MMS has always considered that each failure to

report, or wrongly reporting a line that is required to be reported, is

a violation. For example, if a company fails to report its production

of natural gas, each line for which natural gas should have been

reported on the production report is a violation, and each month and

each lease for which it should have been reported constitutes an

additional violation.

Section 241.51 What May MMS Do if I Violate a Statute, Regulation,

Order, or Lease Term Relating to a Federal or Indian Oil and Gas Lease?

Comment--One commenter noted that this section does not provide for

the appointment of an agent to receive service. It also believes that

the Department is obligated to allow this designation under 30 U.S.C.

1719(h). In addition, the commenter also believes that the statute only

allows notice by personal service or registered mail. However, it

believes that although express mail and certified mail are not

permitted, they should be.

Response--We agree that this section, as proposed, does not allow

specifically for the appointment of an agent to receive service.

However, it proposed to use the proposed provisions of 30 CFR

[[Page 26242]]

242.304 and 242.305, which provide for service to designated persons.

For violations concerning a royalty report (Form MMS-2014), MMS will

send the notice to the individual named by the lessee, designee,

reporter or payor as the person to whom to direct correspondence. A

similar provision was included for violations concerning production

reports and audits. The proposed rule did not provide for designations

of persons to be served with notices of violations committed by payors

or designees of which the lessee receives notice. MMS has not

traditionally sent notices of noncompliance to lessees that are not

acting as reporters, designees or payors. For this reason, we did not

consider this possibility when proposing these rules. We have now added

provisions to section 241.51 clearly allowing the designation of an

agent for the receipt of notices of noncompliance and civil penalty

notices.

We also agree that we are limited in how we may serve notices under

30 U.S.C. 1719(h). While we also agree that we should be able to use

other forms of service, we have clarified that service must be by

registered mail or personal service, both in this section and in

section 241.61.

Section 241.52 What If I Correct the Violation?

Comment--One comment was received, to the effect that this section

conflicts with section 241.54, by implying that no review was possible

in the case of a company that has complied with a notice of

noncompliance within the statutory 20-day period to correct the

violation.

Response--We believe that the language in proposed section 241.54

that allowed review ``regardless of whether you correct the

violations,'' clearly means that a party may seek a hearing on the

record even if it complied with requirements stated in a notice of

noncompliance. However, we have no record of any past case in which a

violator corrected a violation and then requested a hearing.

Section 241.53 What If I Do Not Correct the Violation?

Section 241.54 How May I Request a Hearing on the Record on a Notice

of Noncompliance?

Section 241.55 Does My Request for a Hearing on the Record Affect the

Penalties?

Comments--We received two comments concerning these sections. These

commenters believed that the rule should provide for: (1) a longer than

20-day period for the recipient of a notice to file its request for a

hearing (preferably 40 days); (2) a separate opportunity for a hearing,

even if no request for a hearing is made from the notice of

noncompliance; (3) a mechanism for expedited review when there is a

request for a stay to allow substantive review without the risk of

incurring penalties; and (4) more specific regulatory criteria for

determining the amount of penalties. The commenters reasoned that the

purposes of 30 U.S.C. 1719, as well as all of FOGRMA, are to encourage

voluntary compliance, and imply that the rule, as proposed, violates

due process.

Response--Starting with how we determine the amount of penalties,

we do not believe that it is necessary to provide the detailed

standards for setting penalty amounts in regulatory form. MMS has

written guidelines which set out, in ranges, appropriate penalties for

a variety of circumstances. We do not believe it is possible to set out

all the standards in advance in a permanent fashion by rule. FOGRMA

requires only that ``In determining the amount of such penalty, or

whether it should be remitted or reduced, and in what amount, the

Secretary shall state on the record the reasons for his

determinations.'' 30 U.S.C. 1719(i). This subsection neither requires,

nor implies, that the determination be made through regulation, which

would limit the flexibility of DOI in setting penalty amounts

appropriate to the wide variety of possible circumstances that should

be considered. However, to assist potential recipients of notices of

noncompliance, the following table shows the current non-binding

guidelines MMS uses:

------------------------------------------------------------------------

Company size

Violation ----------------------------

Minor Moderate Major

------------------------------------------------------------------------

Failure to report.......................... $0-10 $0-25 $5-500

Failure to pay............................. 0-20 2-50 10-500

Failure to provide information............. 0-100 2-200 20-500

Failure to comply with order to perform 0-15 2-35 10-500

restructured accounting...................

------------------------------------------------------------------------

Note: Amounts in Dollars per violation per month.

We also believe that the current regulations of the Hearings

Division of the Office of Hearings and Appeals at 43 CFR 4.21 have

proven more than adequate when an appellant petitions for a stay. We

have used these procedures for 15 years without any complaints about an

appellant's inability to have its petition timely and fairly reviewed

by the Hearings Division. We therefore will not change the procedures

to mandate a faster review of requests for stays of accrual of

penalties.

As to the commenter's first two requests, FOGRMA grants the

Secretary the discretion to set the time limits for an appellant to

request a hearing. MMS has operated under rules requiring hearings to

be requested within 20 days of the date of receipt of the notice of

noncompliance for more than 15 years without complaint. In spite of

this history, in the interests of increasing a violator's ability to

request hearings, we have changed the proposed rule to allow 30 days

from the date of receipt of the notice of noncompliance for an

appellant to request a hearing on the record. MMS has a long history of

using a 30-day period in other contexts (specifically for appeals from

MMS orders), which allows ample time for appellants to decide whether

to seek review in those cases.

We agree with the comment that the violator may still have need for

redress concerning the amount of a civil penalty even though that

violator did not contest the notice of noncompliance. We therefore have

added new sections 241.56 and 241.64 that allow a violator, who did not

request a hearing on the record on a notice on noncompliance, 10 days

from the receipt of the Notice of Civil Penalty to request a hearing on

the record limited to the issue of the amount of the penalty only. By

not requesting a hearing on the record on the notice of noncompliance,

the recipient waived the right to contest the underlying liability for

penalties.

Section 241.60 May I Be Subject to Penalties Without Prior Notice and

an Opportunity to Correct?

Section 241.61 How Will MMS Inform Me of Violations Without a Period

To Correct?

Section 241.62 How May I Request a Hearing on the Record on a Notice

of Noncompliance Regarding Violations Without a Period To Correct?

Section 241.63 Does My Request for a Hearing on the Record Affect the

Penalties?

Comments--We received one set of comments that addressed these

sections concerning penalties that may begin without a period to

correct. The first issue involves the definition of violation. The

commenter referred to FOGRMA, which provides for an

[[Page 26243]]

assessment of $25,000 per day for each day such violation continues.

The commenter believes that MMS has been inconsistent by specifying a

penalty calculated at $25,000 per day for each violation. The second

issue is similar to the comments on sections 241.52 through 241.54 in

that no separate right of review is granted as to the amount of the

penalty and that the time to seek review is too short.

We also received one comment that addressed a statement in the

preamble that MMS believes that the statutory provision for assessing

penalties for ``failure to permit entry, inspection or audit'' applies

to failure to provide MMS with documents that MMS has requested under

authority of FOGRMA, the regulations or the leases. The commenter noted

that MMS has argued in court that audit requests are voluntary and, for

that reason, that they are not appealable agency actions. The commenter

continued by saying that argument is inconsistent with making lessees

subject to FOGRMA penalties without opportunity to correct for not

complying with audit requests.

Response--As we explained in the response to comments on section

241.50, we believe MMS has been very clear over the past decade and

one-half that each failure to comply with the mandates of law is a

separate violation. We believe that while FOGRMA uses the word ``such''

rather than ``each,'' their meaning is identical in the context of this

regulation. ``Such is a demonstrative word used to indicate the quality

or quantity of a thing * * *.'' The definition of ``each'' is ``Every

(individual of a number) regarded or treated separately.'' The Compact

Edition of the Oxford English Dictionary 823 Vol I and 3136, Vol. II

(1971). In both cases the word signifies a quantity. In the context of

FOGRMA, there is a separate violation, and thus a separate penalizable

act with a separately accruing penalty, for each such violation. The

regulation's meaning is identical to the statute's meaning.

As to the potential problem with a person wanting to appeal only

the amount of the penalty, we have added a provision at section 241.64

allowing a hearing on that issue alone, paralleling the new section

241.56.

We continue to believe there are circumstances where a refusal to

provide MMS, or a delegated State, or a Tribe operating under a

cooperative agreement (or under a self-determination contract or

compact), with documents during an audit would amount to a failure to

permit lawful audit. The exact circumstances under which MMS may use

this provision will be addressed in future proceedings when MMS

believes an appropriate case has arisen.

Section 241.70 How Does MMS Decide What the Amount of the Penalty

Should Be?

Comment--One comment was received that complained that the criteria

articulated for determining the quantum of civil penalty are

inadequate. The commenter demanded that more specific criteria be

articulated to provide a reviewing officer and a court more objective

criteria for determining the exercise of the agency's authority.

Response--MMS has operated under provisions similar to these for 15

years without complaint. Neither Administrative Law Judges, the

Interior Board of Land Appeals, nor the Federal courts found any need

for guidance in the form of a regulation. Indeed, FOGRMA only requires

``In determining the amount of such penalty, or whether it should be

remitted or reduced, and in what amount, the Secretary shall state on

the record the reasons for his determinations.'' 30 U.S.C. 1719(i). As

mentioned in the response to sections 241.53, 241.54 and 241.55, we

intend to continue to articulate our reasons as part of the

administrative record rather than attempting to do so in a rule.

Section 241.74 May I Seek Judicial Review of the Decision of the

Interior Board of Land Appeals?

Comment--One comment was received to the effect that the regulation

should include the 30 U.S.C. 1719(j) requirement that judicial review

must be taken in the United States District Court for the judicial

district in which the violation allegedly took place.

Response--We do not have the ability to determine jurisdiction or

venue, or other rules concerning review by Federal courts. We have

therefore simplified the regulation by making it a mere pointer to the

proper section of the United States Code. We have retained the sentence

informing the reader of the time limit to make it easier for readers of

these regulations to comply within the statutory time limit.

Section 241.75 When Must I Pay the Penalty?

Comment--One comment was received repeating the request for

separate review of the amount of the penalty.

Response--As mentioned above, we have added provisions allowing for

hearings on the record limited to the amount of penalty assessed.

Therefore, the paragraph within this section as proposed that

prohibited such reviews has been removed.

Section 241.77 How May MMS Collect the Penalty?

Comment--One comment was received that complained that MMS has no

statutory authority under FOGRMA for execution against a lease surety

or to offset amounts the United States owes to the violator.

Response--FOGRMA specifically provides for offset: ``The amount of

any penalty under this section, as finally determined may be deducted

from any sums owing by the United States to the person charged.'' 30

U.S.C. 1719(f). There is no specific statutory authority regarding

collecting against lease sureties. They fall under the plenary

regulatory authority of the Secretary under the mineral leasing laws.

This regulation is sufficient authority under those provisions.

V. Section-by-Section Analysis, 30 CFR Part 242

We have decided not to finalize part 242 as proposed on January 12,

1999, at this time. However, we have reserved this part for future

publication.

VI. Section-by-Section Analysis for 30 CFR Part 243 Suspensions

Pending Appeal and Bonding--Royalty Management

General comments--We received two sets of comments that addressed

this rule, one from an oil and gas producer and one from an association

of oil and gas companies. The producer's comments were favorable to the

proposed rule and referred to the association's comments for specific

suggestions.

The association also welcomed the proposed rule and MMS's proposal

to apply the rules even to situations where they are not mandated by

RSFA, such as production from periods prior to September 1996 and to

leases for minerals other than oil and gas. The commenter also

responded to the question about whether the rules should apply to

Indian leases as well as to Federal leases. That commenter stated that

it believed that the rules should apply to all appeals, because Indian

lessors as well as the Federal Government would be protected by the

financial solvency provisions.

Response--We appreciate the favorable comments on the proposal.

Upon considering the comment that the financial solvency provisions of

the proposed rule should apply to Indian as well as Federal leases, we

have decided that there are important reasons for having different sets

of rules for Indian

[[Page 26244]]

and Federal leases. First, Indian lessors are not in a comparable

position to the United States in their ability to absorb the risk of

default by a person believed to be financially solvent but who later

defaults on an appealed obligation. Indian lessors are much smaller,

less diversified in their portfolio of risks than the United States,

and are in a significantly less advantageous position than the United

States. Second, the standards that we apply, and must apply, to Indian

leases are different from those applied to Federal leases. We have a

trust responsibility to Indian lessors and believe that requiring the

protection of sureties for appeals of obligations on Indian leases is

appropriate. Finally, Congress declined to extend the benefit of self-

bonding by demonstration of financial solvency to lessees on Indian

lands. For these reasons, we will keep the separation between Indian

and Federal leases as it was in the proposed rule.

Section 243.3 What Definitions Apply to This Part?

Section 243.4 How Do I Suspend Compliance With an Order?

Comment--One commenter requested that definitions follow the RSFA

definitions. In particular, ``order'' does not appear to include

anything other than orders to pay monetary obligations. Therefore the

rules seem only to permit the suspension of these orders.

Response--The purpose of the use of the word ``order'' in this part

is to refer to the proper parts under which an appeal may be taken for

which compliance may be suspended under this part. To avoid confusion

we have deleted the reference to monetary obligation. We have clarified

section 243.4 to provide that appeals of orders that do not require the

making of a payment may be suspended without posting a surety or

demonstrating financial solvency.

Section 243.5 May Another Person Post a Bond or Other Surety

Instrument or Demonstrate Financial Solvency on My Behalf?

Comment--One commenter responded to our request for comments on

whether any limitations are needed on who may post surety or

demonstrate financial solvency on behalf of an appellant. That

commenter does not believe any limitations are appropriate.

Response--We appreciate the comment, and we believe that the phrase

``any other person'' clearly places no limitation on who may post

surety or demonstrate financial solvency on a lessee's behalf.

Therefore, we have decided to leave the rule as proposed.

Section 243.6 When Must I or Another Person Meet the Bonding or

Financial Solvency Requirements Under This Part?

Comment--One commenter believes this section should be amended to

make it clear that only one bond or demonstration of financial solvency

is required for any particular liability. The commenter does not

believe MMS should require sureties from a lessee and its designee for

the same liability. While the commenter believes, from our explanation

in the preamble to the proposed rule, that only one guarantee is

intended, it believes the rule itself should make clear that either the

lessee or the designee, but not both, is required to post surety or

demonstrate financial solvency.

Response--We have inserted the word either in this section to

clarify that only one surety is required, regardless of the identity of

the person or persons posting the surety or sureties.

Section 243.8 When Will MMS Suspend My Obligation To Comply With an

Order?

Comment--One commenter applauded MMS's proposal to increase the

minimum amount under appeal for which no bond or demonstration of

financial solvency is required. It urged that the same rules apply to

appeals with respect to Federal and Indian lands.

Response--As explained above, we believe it is appropriate to have

different standards with respect to Federal and Indian lands, and we

decline to change the standards here.

Section 243.10 When Will MMS Initiate Collection Actions Against a

Bond or Other Surety Instrument or a Person Demonstrating Financial

Solvency?

Comment--One commenter noted that the time period for MMS to

initiate collection actions against the bond or other surety is

inconsistent with the Mineral Leasing Act, 30 U.S.C. 226-2, which

allows 90 days for an appellant to seek judicial review of an adverse

decision by the Department. The proposed rule, by contrast, allowed MMS

to call on the surety within 30 days of such an adverse decision.

Response--We agree that the proposed rule should track the time

period in the Mineral Leasing Act with respect to oil and gas leases

for cases in which there is a decision of the IBLA or an Assistant

Secretary that is subject to judicial review. We therefore have

increased the time to 90 days in the final rule for those cases.

Section 243.11 May I Appeal the MMS Bond-Approving Officer's

Determination of My Surety Amount or Financial Solvency?

Comment--One commenter noted that it did not object to the proposal

that there would be no administrative review of determinations of the

Bond-Approving Officer, but requested that we clarify that the

determinations are judicially reviewable.

Response--Whether a court would have jurisdiction to review these

determinations is a matter of statute rather than regulation.

Therefore, we are not amending the rule to specifically provide for

judicial review.

Section 243.12 May I Substitute a Demonstration of Financial Solvency

for a Bond Posted Before the Effective Date of this Rule?

Comment--One commenter urged that this section be amended to allow

an appellant to replace a surety with a self-bond at any time, not just

``when the surety instrument is due for renewal.'' The commenter's

reason was that an appellant may have many bonds due for renewal at

different times. ``Depending on the circumstances, it may be more

administratively convenient * * * to replace all of its bonds with a

demonstration of financial solvency at the same time.''

Response--It was not our intent to prevent an appellant from

choosing between replacing its sureties individually as they expire, or

replacing all sureties at once. To avoid confusion, we have amended

this section to allow replacement of sureties at administratively

convenient times.

Section 243.200 How Do I Demonstrate Financial Solvency?

Comment--One commenter noted that the proposed rule appears

inconsistent with the preamble. The preamble noted that MMS could

require updated financial statements to monitor demonstrations of

financial solvency if the demonstrator files for bankruptcy. The

regulatory language allows MMS to require updated financial statements

upon request. The commenter urged MMS to specify the circumstances,

other than bankruptcy filings, that might justify an appellant to

redemonstrate financial solvency.

Response--We did not intend to narrow the rule by the preamble. The

broader requirements of the rule will remain unchanged. We expect MMS

to very rarely request an updated financial statement, but we believe

the flexibility

[[Page 26245]]

is needed for circumstances that we cannot currently foresee.

VII. Section-by-Section Analysis 30 CFR Part 250

Comment--No comments were received on the proposed amendments to

part 250.

VIII. Section-by-Section Analysis 30 CFR Part 290

Subpart A--Offshore Minerals Management Appeals Procedures

Section 290.2 Who May Appeal?

Comment--One commenter asked if an appeal from an order issued by

an MMS Offshore Minerals Management (OMM) official would be appealable

under the new 43 CFR part 4 subpart J, which is designed for appeals

from orders issued by MMS Royalty Management Program (RMP) officials.

Another commenter asked if we could do away with the exclusions listed

in section 290.2.

Response--An order issued by an MMS OMM official is not appealable

under the new 43 CFR part 4 subpart J. To clarify this matter, section

290.2 will specify that your appeal to IBLA is under 43 CFR part 4

subpart E. Adding the reference to subpart E is consistent with section

290.8(a) and should clarify the fact that appeals from orders issued by

MMS OMM officials are appealed to IBLA under 43 CFR part 4 subpart E.

The RSFA rule of decision provisions made final in 43 CFR part 4

subpart J do not apply to appeals of OMM orders.

Also, because we are not publishing a final rule on a new royalty

appeals process at this time, we are dividing part 290 into two

subparts to distinguish between appeals from orders issued from MMS's

RMP and orders issued from MMS's OMM Program. Appeals of OMM orders

will be under the rule at 30 CFR part 290 subpart A. Appeals of RMP

orders will be under 30 CFR part 290 subpart B.

As for doing away with the exclusions listed in section 290.2, the

exceptions listed for decisions concerning lease bids and deep water

field determinations are based on current requirements in other

sections of our rules (the sections were referenced in the proposed

rule). The changes proposed to the current OMM appeals process were

aimed at streamlining and simplifying the appeals process and do not

affect any other MMS rules or requirements.

Section 290.5 How do I Pay My Processing Fee?

Section 290.6 How Will MMS Notify Me of Its Action on my Request?

Section 290.7 What is the Filing Date for My Appeal?

Comment--We received numerous comments criticizing the complexity

of the proposed appeals rule.

Response--We believe it would be desirable to simplify this OMM

appeals rule by removing the provisions in sections 290.5, 290.6 and

290.7 of the proposed rule.

We are deleting the requirement to pay the processing fee by

electronic funds transfer, based upon conversations with officials in

the Treasury Department. Therefore, you may pay by following the

procedures in place at 30 CFR 218.51. We are also removing the parts

dealing with a waiver of the $150 processing fee imposed on each

appeal. The operators on the Outer Continental Shelf (OCS) are large

enough that they would not be able to justify the need for a waiver of

a $150 processing fee for their appeal. Also, because the amount of the

fee is nominal, the waiver provision in the proposed rule is not needed

to meet the requirements of the Small Business Regulatory Enforcement

and Fairness Act or the Regulatory Flexibility Act.

The date the appeal is filed will continue to be, as in the past,

the date the Notice of Appeal is received in the OMM office. The

processing fee will be paid by check with the Notice of Appeal.

Subpart B--Appeals of Royalty Management Program and Delegated State

Orders

Comments--We received no comments on this subpart because it was

not separately proposed. The revisions made in this subpart incorporate

portions of the proposed appeals rule that are necessary to implement

certain provisions of RSFA, and to separate appeals of royalty-related

orders from appeals of Offshore Minerals Management Program orders. The

OMM-related appeals are few in number and under the new subpart A will

go directly to the IBLA. We did receive comments on some of the

definitions in the proposed appeals rule that are contained in this

part. The revisions made in this subpart also rewrite the headings in

former part 290 in ``plain language,'' and clarify portions of former

part 290.

In addition, we deleted former section 290.4 titled ``Oral

Argument'' because they were rarely requested and rarely granted. This

is also consistent with the proposed rule which did not provide for

appellants to request oral argument before the IBLA.

Section 290.100 What is the Purpose of This Subpart?

Comments--We did not receive any comments on this section.

Response--The purpose of this subpart is to provide the procedures

to appeal MMS or delegated State orders concerning reporting to the

MMS's RMP and the payment of royalties and other payments due under

leases subject to this subpart. Subpart A of this part applies to

appeals of MMS's OMM program actions.

Section 290.101 What Leases Are Subject to This Subpart?

Comments--We received no comments on this subpart.

Response--This section is the same as proposed 43 CFR 4.902. We

specifically note that the scope of this subpart is not limited to

those orders that are subject to RSFA time of decision requirements in

30 U.S.C. 1724(h). This subpart covers all appeals of RMP or delegated

State orders, including orders concerning Federal leases for minerals

other than oil and gas, all Indian leases, orders to provide

information, produce documents, etc., and is not limited to Federal oil

and gas leases. Included in this subpart are some provisions specific

to orders that RSFA covers.

Section 290.102 What Definitions Apply to This Subpart?

Comments--This section contains definitions that are similar to

those found in proposed 43 CFR 4.903, for which we received comments to

which we respond in our preamble discussion of 43 CFR part 4 subpart J

in this final rulemaking. Please refer to the comments and responses to

definitions in that subpart in this preamble. There are some

differences in definitions because 43 CFR part 4 subpart J applies only

to orders that are subject to RSFA time of decision and rule of

decision requirements. The coverage of this subpart, in contrast, is

broader. Those differences are apparent from the text of the

definitions. For definitions included in this part that are not in 43

CFR part 4 subpart J there were no comments.

Section 290.103 Who May File an Appeal?

Comments--We received no comments on this section.

Response--We retained the requirement formerly found at 30 CFR

290.2 that you may appeal an order you receive if it adversely affects

you or your lessee. We also added the provision

[[Page 26246]]

proposed as 43 CFR 4.904(b) allowing lessees that receive a Notice of

Order to either appeal the order or join in their designee's appeal

under Sec. 290.106.

Section 290.104 What May I Not Appeal Under This Subpart?

Comments--We received no comments on this section.

Response--This addition to this subpart was proposed as 43 CFR

4.905(a) and (c).

Section 290.105 How Do I Appeal an Order?

Comments--We received no comments on this section.

Response--We combined the requirements found in former 30 CFR

290.3, 290.5 and 290.6, and rewrote them in plain language. We also

eliminated 30 CFR 290.3(b) which required a field report. This is

consistent with the agency's and industry's desire to accelerate the

appeals process.

Section 290.106 How Do Lessees Join a Designee's Appeal and What is

the Effect of Joinder?

Comments--We received no comments on this section.

Response--This section was proposed as 43 CFR 4.908. We made minor

changes necessary to reflect that the appeal is to the MMS Director

under this part, not the Office of Hearings and Appeals.

Section 290.107 Where are the Rules Concerning the Effect of the

Department Not Issuing a Decision in My Appeal Within the Statutory

Time Frame?

Comments--We received no comments on this section.

Response--This section was necessary to direct appellants to the

rules concerning the effect of DOI not issuing a decision in your

appeal within the 33-month period prescribed under 30 U.S.C. 1724(h).

Those rules are located in 43 CFR part 4 subpart J.

Section 290.108 How Do I Appeal to the IBLA?

Comments--We received no comments on this section.

Response--This section was the former 30 CFR 290.7. We added a

provision that directs appellants to 43 CFR part 4 subpart E.

Section 290.109 How Do I Request an Extension of Time?

Comments--See preamble discussion of 43 CFR 4.909.

Response--See preamble discussion of 43 CFR 4.909. This section was

proposed as 43 CFR 4.958. We made minor changes necessary to reflect

that the appeal is to the MMS Director under this part, not OHA, and to

differentiate those appeals that involve extensions of the RSFA time of

decision requirements from those that do not.

Department Hearings and Appeals Procedures

IX. Section-by-Section Analysis, 43 CFR Part 4--

Subpart J--Special Rules Applicable to Appeals Concerning Federal

Oil and Gas Royalties and Related Matters

Section 4.901 What Is the Purpose of This Subpart?

Comments--We did not receive any comments on this section.

Response--Even though we did not receive any comments on this

section, we must amend the text because we are not finalizing the

entire proposed rule at this time. The purpose of this subpart is

revised to explain how the time limits of 30 U.S.C. 1724(h) apply to

appeals subject to this subpart.

Section 4.902 What Appeals are Subject to This Subpart?

Comments--In the proposed rule, this section heading read, ``What

leases are subject to this subpart?'' We received no comments on that

section.

Response--Even though we did not receive any comments on this

section, we must amend the text because we are not finalizing the

entire proposed rule at this time. The section heading is changed to

read, ``What appeals are subject to this subpart?'' We had to change

the heading and content of this section to make clear what appeals this

subpart applies to because the sole purpose of this subpart is to

implement the time limits and rule of decision of 30 U.S.C. 1724(h).

Because section 1724(h) only applies to appeals of orders involving

Federal oil and gas leases, this section will state that the subpart

applies only to appeals of orders or portions of orders involving the

payment of royalties and other payments due, and the taking or delivery

of royalty in kind, under Federal oil and gas leases. Moreover, it

would make clear that its provisions apply to appeals to the MMS

Director under 30 CFR part 290 before this rule became effective,

appeals to the MMS Director under new 30 CFR part 290 subpart B after

this rule became effective, and appeals to the IBLA under 43 CFR part 4

subpart E, both before and after the effective date of this rule. This

section further specifies that this subpart does not apply to appeals

of orders (or portions of orders) that involve Indian leases or Federal

leases for minerals other than oil and gas, or that relate to Federal

oil and gas leases but do not involve a monetary or nonmonetary

obligation.

Section 4.903 What Definitions Apply to This Subpart?

Comments--We received several comments that the definition of

``lessee'' in the proposed rule should quote the definition in RSFA.

The commenters believed that it was inconsistent with RSFA to define

lessees to include persons to whom a lease interest is assigned.

Response--In the proposed rule, we decided not to quote the exact

definition of ``lessee'' found in RSFA because the proposed rule

applied to more than oil and gas leases subject to RSFA. Moreover, we

do not believe that the additional language in the proposed rule is

inconsistent with RSFA. The RSFA definition states that ``lessee''

includes ``any person to whom operating rights have been assigned.''

The proposed rule defines ``lessee'' to include ``any person to whom

all or part of the lessee's interest or operating rights in a lease

subject to this subpart has been assigned.'' We do not believe that it

is inconsistent with RSFA, or any law, to define a ``lessee'' as a

person to whom all or part of the lessee's interest has been

``assigned,'' or, in other words, to whom all or part of the lessee's

interest has been sold. To the contrary, it would be inconsistent with

RSFA and prevailing law and regulations to state that assignees of

leases are not lessees. Therefore, we are not changing the definition

of ``lessee'' in the proposed rule.

Comments--We received several comments on the definition of

``monetary obligation'' in the proposed rule. Commenters for the State

of California Controller's Office felt that the proposed definition

``invited dispute'' over what an ``issue'' is, because ``a particular

underpayment may be attributable to overlapping regulatory

violations.'' Thus, the California Controller's Office suggested that

it would be more administratively efficient if a monetary obligation

was defined as the total amount stated or estimated in the order.

Another commenter stated that the plain meaning of monetary is

``payable in money,'' and by including orders to recalculate royalties,

DOI is ``attempting to circumvent'' the default decision provisions of

30 U.S.C. 1724(h). Finally, two commenters believe that RSFA requires

us to define monetary obligation as ``the principal amount due on each

lease for each month'' because

[[Page 26247]]

that is what is required under the RSFA definition of an ``order to

pay.''

Response--With respect to the California Controller's Office's

comment that ``monetary obligation'' should be defined as the total

amount of underpayments in an order, we do not believe that the

definition was confusing. We believe that because orders identify the

specific regulatory violation and the associated underpayment, there

should be no confusion. For example, if an order stated an underpayment

amount attributable to a lessee's failure to include tax reimbursements

in its gross proceeds, and stated another underpayment amount

attributable to an improper deduction from the lessee's gross proceeds,

we believe it is clear that although both violations involve the gross

proceeds rule, they stem from different issues and involve separate

underpayments, and thus it is reasonable to consider them to be

separate obligations.

We disagree with the inference drawn by the commenter who asserted

that the only interpretation of ``monetary'' is ``payable in money.''

We are not attempting to circumvent the default decision provisions of

section 1724(h) by including orders to recalculate and pay in the

definition of monetary obligation. First, as we stated in the preamble

to the proposed rule, Congress did not define ``monetary.'' However,

both Webster's Dictionary and Black's Law Dictionary define monetary as

``related to'' money. We believe that orders to recalculate and pay are

clearly related to money, and include a requirement to pay money, and

as such are ``monetary'' in nature. Second, the only ``obligation'' of

a lessee under RSFA that is nonmonetary, and not ``related to money''

is a lessee's duty to deliver royalty in kind. Therefore, we are not

amending this definition to state that monetary obligations do not

include orders to recalculate and pay.

We also disagree with the comments that because RSFA defines an

``order to pay'' as a written order that ``specifically identifies the

obligation by lease, production month and monetary amount of such

obligation'' we must define monetary obligation the same way. As stated

above, Congress did not define monetary obligation. Congress did,

however, define ``obligation.'' Under RSFA, an ``obligation'' is a

specified lessee duty ``which arises from or relates to any lease * * *

or any mineral leasing law * * * *'' 30 U.S.C. 1702(25)(B). Therefore,

we disagree with the commenters that an obligation must be limited to

one lease. We also do not agree that an obligation must be limited to

one month. Rather, RSFA implies that an ``obligation'' may be issue-

specific (``related to any mineral leasing law,'' which includes

regulations). Accordingly, we are not changing the proposed definition

of monetary obligation in the manner the commenter requests.

We are revising the definition of monetary obligation as proposed

to clarify that monetary obligation also includes the Secretary's duty

to pay, refund, offset, or credit the amount of any obligation that a

lessee, designee, or payor has asserted in a request for payment,

refund, offset, or credit that MMS or a delegated State has denied.

This follows from the definitions of ``demand'' and ``obligation'' in

the new 30 U.S.C. 1702(23)(B) and (25)(A)(ii) as added to FOGRMA by

RSFA section 2, 110 Stat. 1701. Administrative appeals of denials of

requests by lessees, designees, or payors for refund, offset, credit,

etc., are subject to the RSFA time of decision and rule of decision

requirements of 30 U.S.C. 1724(h), which covers both ``demands'' and

``orders issued by the Secretary or a delegated State'' that are

``subject to administrative appeal in accordance with the regulations

of the Secretary.''

Comments--Several commenters objected to our decision to include

subsection (2)(i) in the definition of ``order'' which states that

orders do not include nonmandatory valuation determinations. Some

commenters felt that defining a valuation determination that does not

have mandatory or ordering language to not be an appealable ``order''

conflicts with other sections of MMS valuation regulations that allow

lessees to request valuation determinations, such as 30 CFR 206.257(f).

The commenters felt that under the current regulations, all valuation

determinations must be mandatory. One commenter stated that the

definition creates ``two types of valuation determinations, those that

contain mandatory or ordering language and those that do not. Only

those that contain mandatory or ordering language would be

appealable.'' We received similar comments regarding our proposal to

make nonmandatory policy determinations non-appealable. One commenter

stated that subpoenas that do not meet the requirements of 30 U.S.C.

1724(d)(2) should be appealable.

Response--We have provided that an order is appealable only when

the document ``contains mandatory or ordering language''--in other

words, when the disputed legal issues and the facts involved are

sufficiently definite to allow for meaningful adjudication. As we

stated in the proposed rule, we do not consider advice or guidance

contained in a nonmandatory valuation determination to be an ``order''

because it does not compel anyone to take particular action. Likewise,

general policy guidance contained in a letter to payors does not

contain mandatory language requiring lessees to do anything. If the

advice or guidance does not require the lessee to do anything, there is

nothing to appeal.

For example, it is possible for a lessee to first receive a ``Dear

Payor'' letter or valuation determination with general advice, next a

request or subpoena for documents that would enable the Government to

evaluate whether the lessee has followed that advice, and, finally, an

order applying the Government's understanding of the law and facts that

could be tested in an administrative appeal. Lastly, we do not believe

that making nonmandatory valuation determinations non-appealable

conflicts with other valuation regulations. Those regulations allow

lessees to request a valuation determination. If MMS issues a binding

determination under those rules in response to the request, then such a

determination is appealable. Therefore, for the reasons explained

above, we are not changing the definition of order to make nonmandatory

advice and guidance appealable.

We disagree with the comment that we should define subpoenas as

being appealable orders. As we stated in the preamble, subpoenas are

enforceable directly by the United States Government in Federal

district court under 30 U.S.C. 1717(b), and are not subject to

administrative appeal. Nothing in section 1724(d)(2) changes that fact.

Therefore, they also are not appealable ``orders,'' and we are not

changing the rule as the commenter suggested.

Because the purpose of this subpart is to implement the RSFA

decision deadlines and rules of decision in 30 U.S.C. 1724(h)(1) and

(2), and is not part of a general appeals provision as proposed, we

have narrowed the definition of ``order'' for purposes of this subpart

only. That definition makes clear that orders under this subpart are

only those orders that involve either monetary obligations or

nonmonetary obligations under Federal oil and gas leases and therefore

subject to 30 U.S.C. 1724(h)(1) and (2) as enacted by RSFA.

We also have revised the proposed definition of order to clarify

that order does not include a Notice of Noncompliance or Notice of

Civil Penalty issued under the provisions of FOGRMA section 109, 30

U.S.C. 1719, and implementing regulations at 30 CFR

[[Page 26248]]

part 241. Nor does order include a decision of an administrative law

judge following a hearing on the record on a Notice of Noncompliance or

Notice of Civil Penalty under FOGRMA section 109(e), 30 U.S.C. 1719(e),

and associated regulations. Likewise, order does not include a decision

of the IBLA on appeal from a decision of an administrative law judge

following a hearing on the record. This follows from the first sentence

of 30 U.S.C. 1724(h)(1), which establishes that the RSFA time of

decision and rule of decision requirements cover ``demands or orders

issued by the Secretary or a delegated State'' that are ``subject to

administrative appeal in accordance with the regulations of the

Secretary.'' FOGRMA civil penalty assessments result from an entirely

different process that is prescribed separately by statute.

Civil penalty assessments do not result from administratively

appealable MMS or delegated State orders. Instead, FOGRMA section

109(e) prescribes that no civil penalty may be assessed until a person

has been given an opportunity for a ``hearing on the record''--i.e., a

formal trial-type hearing before an administrative law judge, which

must be conducted under Administrative Procedure Act provisions at 5

U.S.C. 554, 556, and 557. The rules at 30 CFR part 241 implement the

statutory requirements of those sections regarding adjudication and

agency review.

It appears plain that Congress did not intend for the RSFA time of

decision and rule of decision requirements to cover FOGRMA civil

penalty proceedings. RSFA itself is primarily an amendment to FOGRMA

with respect to Federal leases. Had Congress intended to change the

statutory civil penalty procedures, it knew how to do so and could have

done so. There is no mention of any intent to include civil penalty

proceedings within the 30 U.S.C. 1724(h) requirements. Moreover, the

purpose of section 1724(h) was to address perceived problems with MMS's

administrative appeal process that are unrelated to civil penalty

proceedings.

Comment--We did not receive any comments on the definition of

``party.''

Response--Even though we did not receive any comments, we revised

the definition of ``party'' to delete the reference to persons who file

intervention briefs and to make other changes necessary to reflect that

we are not finalizing the entire proposed rule at this time.

Comments--We did not receive any comments on the definition of

``notice of an order.''

Response--Even though we did not receive any comments, we revised

the definition of ``notice of an order'' to delete the reference to 30

CFR part 242 because we are not finalizing that part of the proposed

rule at this time.

Comments--We received comments stating that we should include the

RSFA definition of ``demand'' in our final rule.

Response--We disagree. The portions of the proposed rule that we

are making final do not use the term ``demand.'' The substance of what

RSFA defines as a ``demand'' is encompassed within orders that are

subject to this subpart. Therefore, it is not necessary to define

``demand'' separately in this rule.

Section 4.904 When Does My Appeal Commence and End?

Comments--Several commenters suggested that an appeal should

commence, for purposes of calculating the beginning of the 33-month

period under section 1724(h)(1), on the date an MMS order is received

by the recipient. Some commenters stated that they believe that under

administrative law principles, an agency order that directs a person to

take action starts the person's appellate rights. Thus, they argue that

our definition of ``commence'' discourages an appellant from exercising

those rights and compromises administrative due process in order to

delay commencement of an appeal until we receive all of the items

required in the proposed rule. One commenter believes that the

definition for ``commencement'' under RSFA applies to the appeals

process.

Response--Although we are not finalizing the section of the

proposed rule that these comments were directed to at this time, the

comments are equally applicable to this section, which was proposed as

section 4.971. We recognize both that the MMS order is effective when

it is received and that a recipient may have to wait more than 33

months from that date for a decision by DOI because an appeal will not

commence under this rule until MMS receives the notice of appeal and

statement of reasons under former 30 CFR part 290, before the new

revised 30 CFR part 290 subpart B, promulgated with this rulemaking,

became effective. It is the recipient of the order who ``commences'' an

appeal, not DOI. Until DOI has received a Notice of Appeal, there is no

dispute to be adjudicated, and until DOI has received a Statement of

Reasons giving some reasons for the appellant's disagreement with the

order, it cannot evaluate whether the appellant's disagreement has any

merit. Because the recipient of the order controls when these items are

submitted, we believe it is a reasonable interpretation of section

1724(h)(1) that the 33-month period begins to run when MMS has received

at least minimally sufficient documentation to begin the process of

deciding the appeal. We also believe that this interpretation enhances

the decision-making process.

We have remedied this problem under the new 30 CFR part 290 subpart

B in section 290.109(b) and (c). Under the new subpart B, you may

request an extension of time to file your statement of reasons if you

agree to extend the RSFA time of decision requirement under 30 U.S.C.

1724(h)(1). (Under 30 CFR 290.105(b), there is no extension of time to

file a notice of appeal.) MMS recognizes that different amounts of time

may be necessary for appellants to prepare their written submissions in

different cases, depending on the number and complexity of issues, the

time needed to compile relevant facts and documents, etc. However, MMS

believes that additional time needed in more complicated cases should

not operate to the agency's prejudice. At the same time, it is in the

interest of all parties to know relatively early if a lessee or

designee plans to contest an order, and to provide a ``bright line''

for commencement of the appeal. Hence, after the effective date of the

new 30 CFR part 290 subpart B and this section, your appeal commences

for purposes of section 4.906 and 30 U.S.C. 1724(h) when you file your

notice of appeal. If you then need further time to prepare your

statement of reasons or briefs, you must agree to extend the 33-month

period prescribed in 30 U.S.C. 1724(h)(1).

Before the adoption of this rule, however, MMS received numerous

appeals in which various extensions of time to file statements of

reasons were granted, but in which a corresponding agreement by the

appellant to extend the RSFA 33-month period was not required and was

not automatic. Hence, for the reasons described above, MMS believes the

best reading of congressional intent is to regard the appeal as having

commenced for RSFA purposes at the later of the date the notice of

appeal was filed or the date the initial statement of reasons was

received.

If MMS were to adopt the commenters' suggestion that an appeal

``commenced'' when the order was received, several weeks, or even

months, of the 33-month period could be consumed without DOI being able

to either decide the order was correct or grant relief if it decided

otherwise. Especially in complicated cases, this

[[Page 26249]]

loss of time could seriously disadvantage DOI's ability to consider the

merits of the appeal.

Moreover, we believe the commenter has misconstrued RSFA's

definition of ``commencement.'' As explained in the preamble to the

proposed rule, RSFA did not define ``commencement'' for purposes of the

time of decision requirement in 30 U.S.C. 1724(h)(1) applicable to

``administrative proceedings.'' RSFA did define ``commence'' ``with

respect to a judicial proceeding'' and ``with respect to a demand.'' 30

U.S.C. 1702(20). However, the definition of ``commence'' under 1702(20)

clearly does not encompass ``administrative proceedings'' under 30

U.S.C. 1724(h) or 1702(18). Rather, ``commence'' under section 1702(20)

deals with the ``commencement'' of judicial proceedings or demands for

purposes of the RSFA 7-year limitations period under section 4(a), 30

U.S.C. 1724(b). Accordingly, it is necessary for us in this proposed

rule to define when your appeal ``commenced'' for purposes of section

1724(h).

We have therefore decided not to adopt the commenters' position.

Section 4.906 What If the Department Does Not Issue a Decision by the

Date My Appeal Ends?

Comments--The only comments received regarding this section as

proposed (section 4.956) (other than the comments regarding

``commenced'' and the definition of ``monetary obligation'' discussed

above) were from the solid minerals industry. The trade association

commenter and individual companies again requested that DOI make the

RSFA rule of decision in this section applicable to appeals involving

solid mineral leases.

Response--For the reasons set forth in the preamble to the proposed

rule, we have decided not to make this section applicable to solid

mineral leases. We do not believe that there is any benefit in imposing

a mandatory decision where DOI has not been statutorily directed to do

so.

We have, however, made changes necessary to reflect the fact that

we are not publishing the proposed rule in its entirety at this time.

Those changes would include provisions that refer to appeals to the MMS

Director under 30 CFR part 290 before 30 CFR part 290 subpart B became

effective, appeals to the MMS Director under the new 30 CFR part 290

subpart B (after this subpart became effective) and appeals to the IBLA

under 43 CFR part 4 subpart E, both before and after the effective date

of this subpart.

Section 4.908 What Is the Administrative Record for My Appeal If It Is

Deemed Decided?

Comments--We received no comments on this section.

Response--Even though we did not receive any comments, we made

changes necessary to reflect the fact that we are not finalizing the

entire proposed rule at this time. Those changes would include

provisions that refer to the record in appeals to the MMS Director

under 30 CFR part 290 before 30 CFR part 290 subpart B became

effective, appeals to the MMS Director under the new 30 CFR part 290

subpart B and the record in appeals to the IBLA under 43 CFR part 4

subpart E, both before and after the effective date of this rule.

Section 4.909 How Do I Request an Extension of Time?

Comments--We received one comment on this section (proposed section

4.958) from an industry representative and one from a trade

association. The industry commenter felt that the rule should grant

requests for extensions of time automatically, rather than leave it to

the discretion of the official to whom the request is submitted. The

trade association commenter felt that DOI should ``freely'' grant

requests. The commenter also felt that we should make clear that

parties could ask for extensions of time for any reason, including the

filing of pleadings.

Response--We agree that parties should be able to request

extensions of time for any reason, including for submissions of

pleadings. It was not our intent in the proposed rule to restrict such

requests. Therefore, to clarify that parties may request extensions for

any purpose, we modified this section by eliminating the language in

proposed paragraph (a) that stated parties could request an extension

``to meet any filing requirement under this subpart, or for DOI to

issue a final decision in your appeal.'' Section (a) now states:

If you are a party to an appeal subject to this subpart before

the IBLA, and you need additional time after an appeal commences for

any purpose, you may obtain an extension of time under this section.

With respect to the comment about automatic extensions, although we

expect that we will grant these requests liberally, we are not going to

bind future officials to granting automatic extensions by rule. RSFA

states that the 33-month period may be extended if the Secretary and

appellant agree in writing. We do not know what circumstances may exist

in any particular case that would lead us to not agree to a requested

extension.

IX. Procedural Matters

Regulatory Planning and Review E.O. 12866

This document is not a significant rule and is not subject to

review by the Office of Management and Budget under Executive Order

12866.

(1) This rule will not have an annual effect of $100 million or

more on the economy. It will not adversely affect in a material way the

economy, productivity, competition, jobs, the environment, public

health or safety, or State, local, or tribal governments or

communities. This rule does not require the payment of additional

revenues. This rule sets out how the Department will review MMS's

implementation of royalty and OCS operations policy.

(2) This rule will not create a serious inconsistency or otherwise

interfere with an action taken or planned by another agency. The

primary functions of appealable MMS orders are collecting royalties

from the minerals industry and regulating operations of mineral leases

on the OCS. Other agency functions do not cover these areas.

(3) This rule does not alter the budgetary effects or entitlements,

grants, user fees, or loan programs or the rights or obligations of

their recipients. The administrative appeals process has no impact on

or relation to grants, user fees, loan programs, or the rights and

obligations of their recipients.

(4) This rule does not raise novel legal or policy issues arising

out of legal mandates, the President's priorities, or the principles

set forth in E.O. 12866. This rule was developed in consultation with

States, tribes, and industry.

Regulatory Flexibility Act

The Department of the Interior certifies that this document will

not have a significant economic effect on a substantial number of small

entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).

Accordingly, a Small Entity Compliance Guide is not required.

This rule will affect three groups of individuals or companies: (1)

Indian lessors, (2) lessees and operators on offshore leases, and (3)

lessees, payors, and designees on Federal and Indian leases (onshore

and offshore). Indian lessors are either tribes or individuals.

However, Indian tribes are not considered to be small entities for the

purposes of the Regulatory Flexibility Act, and individuals do not fit

the definition of small entities. As for the remaining groups, the

majority of lessees, designees, payors, and operators on Federal and

Indian onshore leases would be classified as small businesses

[[Page 26250]]

according to the definitions in the Small Business Administration

Standard Industry Code (SIC). Changes in the rule that could have an

economic effect on these groups are the establishment of processing

fees for filing a Notice of Appeal and a Statement of Reasons (to the

extent that any small businesses are operating on the OCS), posting a

bond, and an increase in the maximum civil penalty to $25,000.

Bonding or payment is mandatory for appealed amounts above $10,000

on Federal leases and $1,000 for Indian leases. Appealed amounts less

than $10,000 for Federal and $1,000 for Indian leases do not require

bonding which typically provides relief to small entities. The ability

to demonstrate financial responsibility provides relief of credit

charges from surety companies.

The rule changes the maximum civil penalty to up to $25,000 per day

for those acts for which FOGRMA allows such a penalty. A larger penalty

should not have significant economic impacts because MMS assesses

penalties only when business operations have reached a very poor level

of conduct. Lessees and other payors may use a variety of remedies

including ADR before the assessment of a penalty.

Small Business Regulatory Enforcement Fairness Act (SBREFA)

This rule is not a major rule under 5 U.S.C. 804(2), the Small

Business Regulatory Enforcement Fairness Act. This rule:

a. Does not have an annual effect on the economy of $100 million or

more;

b. Will not cause a major increase in costs or prices for

consumers, individual industries, Federal, State, or local government

agencies, or geographic regions; and

c. Does not have significant adverse effects on competition,

employment, investment, productivity, innovation, or the ability of

U.S.-based enterprises to compete with foreign-based enterprises. This

is an administrative review process; there is no impact on these

things. The rule sets a time limit on when an appealed issue must be

resolved or decided, and gives relief from maintaining bonds in many

instances.

Unfunded Mandates Reform Act

This rule does not impose an unfunded mandate on State, local, or

tribal governments or the private sector of more than $100 million per

year. The rule does not have a significant or unique effect on State

local or tribal governments or the private sector. This rule does not

change the relationship between MMS, IBLA, and State, local, or tribal

governments. A statement containing the information required by the

Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq.) is not required.

Takings (E.O. 12630)

In accordance with Executive Order 12630, the rule does not have

significant takings implications. The rule would not take away or

restrict an entity's right to appeal or bond orders received from MMS

or a delegated State. A takings implication assessment is not required.

Federalism (E.O. 12612)

In accordance with Executive Order 12612, the rule does not have

sufficient federalism implications to warrant the preparation of a

Federalism Assessment. The rule does not change the role or

responsibilities among Federal, State, and local governmental entities.

The rule does not relate to the structure and role of States and will

not have direct, substantive, or significant effects on States. A

Federalism Assessment is not required.

Civil Justice Reform (E.O. 12988)

In accordance with Executive Order 12988, the Office of the

Solicitor has determined that this rule does not unduly burden the

judicial system and meets the requirements of Secs. 3(a) and 3(b)(2) of

the Order. The rule has been reviewed and describes in clear language

what is allowed and what is prohibited. The IBLA and MMS have drafted

this rule in plain language and have consulted with the Department of

the Interior's Office of the Solicitor, RPC Subcommittee, States, and

tribes throughout the rulemaking process.

Paperwork Reduction Act

The Office of Management and Budget (OMB) approved the information

collection requirements contained in this rule under 44 U.S.C. 3501 et

seq., and assigned OMB Control Numbers 1010-0121 and 1010-0122. The

burden hours for the reporting requirements in 30 CFR part 290 are

approved under OMB Control Number 1010-0121. Under the Paperwork

Reduction Act, an agency may not conduct or sponsor, and a person is

not required to respond to, a collection of information unless it

displays a currently valid OMB Control Number. You may obtain a copy of

the information collections by contacting the Bureau's Information

Collection Clearance Officer at (202) 208-7744.

National Environmental Policy Act

This rule does not constitute a major Federal action significantly

affecting the quality of the human environment. A detailed statement

under the National Environmental Policy Act of 1969 is not required.

Clarity of This Regulation

Executive Order 12866 requires each agency to write regulations

that are easy to understand. We invite your comments on how to make

this rule easier to understand, including answers to questions such as

the following: (1) Are the requirements in the rule clearly stated? (2)

Does the rule contain technical language or jargon that interferes with

this clarity? (3) Does the format of the rule (grouping and order of

sections, use of headings, paragraphing, etc.) aid or reduce its

clarity? (4) Would the rule be easier to understand if it were divided

into more (but shorter) sections? (A ``section'' appears in bold type

and is preceded by the symbol ``Sec. '' and a numbered heading; for

example Sec. 4.904.) (5) Is the description of the rule in the

Supplementary Information section of the preamble helpful in

understanding the rule? What else could we do to make the rule easier

to understand?

Send a copy of any comments that concern how we could make this

rule easier to understand to: Office of Regulatory Affairs, Department

of the Interior, Room 7229, 1849 C Street NW, Washington, DC 20240. You

may also e-mail the comments to this address: E[email protected].

List of Subjects

30 CFR Part 208

Continental shelf, Government contracts, Mineral royalties,

Petroleum, Public lands--Mineral resources, Reporting and recordkeeping

requirements, Small businesses, Surety bonds.

30 CFR Part 241

Continental shelf, Government contracts, Indian lands, Mineral

royalties, Natural gas, Penalties, Petroleum, Public lands--Mineral

resources, Reporting and recordkeeping requirements.

30 CFR Part 243

Coal, Continental shelf, Geothermal energy, Government contracts,

Indian lands, Mineral royalties, Natural gas, Petroleum, Public lands--

Mineral resources, Surety bonds.

30 CFR Part 250

Continental shelf, Environmental impact statements, Environmental

protection, Government contracts, Incorporation by reference,

Investigations, Mineral royalties, Natural gas, Oil and gas development

and production, Oil and gas exploration,

[[Page 26251]]

Oil and gas reserves, Penalties, Petroleum, Pipelines, Public lands--

Mineral resources, Public lands--rights-of-way, Reporting and

recordkeeping requirements, Sulphur development and production, Sulphur

exploration, Surety bonds.

30 CFR Part 290

Administrative practice and procedure.

43 CFR Part 4

Administrative practice and procedures, Continental Shelf, Mineral

royalties, Natural Gas, Petroleum, Public Lands--mineral resources.

Sylvia V. Baca,

Acting Assistant Secretary--Land and Minerals Management.

John Berry,

Assistant Secretary for Policy, Management and Budget.

Kevin Gover,

Assistant Secretary for Indian Affairs.

For the reasons set out in the preamble, MMS and OHA are amending

30 CFR Parts 208, 241, 243, 250, and 290; reserving 30 CFR part 242 and

adding 43 CFR part 4, subpart J as follows:

TITLE 30--MINERAL RESOURCES

PART 208--SALE OF FEDERAL ROYALTY OIL

1. The authority citation for part 208 is revised to read as

follows:

Authority: 5 U.S.C. 301 et seq.; 30 U.S.C. 181 et seq., 351 et

seq., 1701 et seq.; 31 U.S.C. 9701; 41 U.S.C. 601 et seq.; 43 U.S.C.

1301 et seq., 1331 et seq., and 1801 et seq.

2. In Sec. 208.2, new definitions are added in alphabetical order

to read as follows:

Sec. 208.2 Definitions.

* * * * *

Contracting officer means the Director, his or her delegate, or the

person designated under a royalty oil purchase contract.

* * * * *

Contracting officer's decision means an MMS order or decision that

a contracting officer issues under this part to a purchaser of oil

under a royalty oil purchase contract.

* * * * *

3. Section 208.16 is revised to read as follows:

Sec. 208.16 How to appeal a contracting officer's decision that you

receive.

If you receive a contracting officer's decision, you may:

(a) Appeal that decision to the Board of Contract Appeals in the

Office of Hearings and Appeals, Office of the Secretary, in accordance

with the procedures provided in 43 CFR part 4, subpart C; or

(b) File an action in the United States Court of Federal Claims.

PART 241--PENALTIES

4. The authority citation for part 241 continues to read as

follows:

Authority: 25 U.S.C 396 et seq.; 25 U.S.C. 396a et seq.; 25

U.S.C. 2101 et seq.; 30 U.S.C. 181 et seq.; 30 U.S.C. 351 et seq.;

30 U.S.C. 1001 et seq.; 30 U.S.C. 1701 et seq.; 43 U.S.C. 1301 et

seq.; 43 U.S.C. 1331 et seq.; and 43 U.S.C. 1801 et seq.;

Sec. 241.20 [Removed]

5. Section 241.20 is removed and subpart A is reserved.

6. Subpart B is revised to read as follows:

Subpart B--Penalties for Federal and Indian Oil and Gas Leases

Definitions

241.50 What definitions apply to this subpart?

Penalties after a Period To Correct

241.51 What may MMS do if I violate a statute, regulation, order,

or lease term relating to a Federal or Indian oil and gas lease?

241.52 What if I correct the violation?

241.53 What if I do not correct the violation?

241.54 How may I request a hearing on the record on a Notice of

Noncompliance?

241.55 Does my request for a hearing on the record affect the

penalties?

241.56 May I request a hearing on the record regarding the amount

of a civil penalty if I did not request a hearing on the Notice of

Noncompliance?

Penalties Without a Period To Correct

241.60 May I be subject to penalties without prior notice and an

opportunity to correct?

241.61 How will MMS inform me of violations without a period to

correct?

241.62 How may I request a hearing on the record on a Notice of

Noncompliance regarding violations without a period to correct?

241.63 Does my request for a hearing on the record affect the

penalties?

241.64 May I request a hearing on the record regarding the amount

of a civil penalty if I did not request a hearing on the Notice of

Noncompliance?

General Provisions

241.70 How does MMS decide what the amount of the penalty should

be?

241.71 Does the penalty affect whether I owe interest?

241.72 How will the Office of Hearings and Appeals conduct the

hearing on the record?

241.73 How may I appeal the Administrative Law Judge's decision?

241.74 May I seek judicial review of the decision of the Interior

Board of Land Appeals?

241.75 When must I pay the penalty?

241.76 Can MMS reduce my penalty once it is assessed?

241.77 How may MMS collect the penalty?

Criminal Penalties

241.80 May the United States criminally prosecute me for violations

under Federal and Indian oil and gas leases?

Subpart B--Penalties for Federal and Indian Oil and Gas Leases

Definitions

Sec. 241.50 What definitions apply to this subpart?

The terms used in this subpart have the same meaning as in 30

U.S.C. 1702.

Penalties After a Period To Correct

Sec. 241.51 What may MMS do if I violate a statute, regulation, order,

or lease term relating to a Federal or Indian oil and gas lease?

(a) If we believe that you have not followed any requirement of a

statute, regulation, order, or terms of a lease for any Federal or

Indian oil or gas lease, we may send you a Notice of Noncompliance

telling you what the violation is and what you need to do to correct it

to avoid civil penalties under 30 U.S.C. 1719(a) and (b).

(b) We will send the Notice to your address of record as shown in

the following table:

--------------------------------------------------------------------------------------------------------------------------------------------------------

For notices of noncompliance to-- The addressee of record is-- And--

--------------------------------------------------------------------------------------------------------------------------------------------------------

(1) A refiner or other party involved The position title, department name and address, or individual name and The refiner or other party must notify

in disposition of Federal royalty address in the executed royalty sale contract; or a different position MMS in writing of all addressee

taken in kind. title, department name and address, or individual name and address changes.

that the refiner or other party under the executed royalty sale

contract identifies in writing for billing purposes; or an agent

designated in writing to receive notices of noncompliance.

[[Page 26252]]

(2) Any person required to report oil The most recent position title, department name and address, or The reporter/payor must notify RMP, in

or gas removed from Federal or Indian individual name and address that RMP has in its records for the writing, of any addressee changes.

leases to the RMP Production reporter/payor; or an agent designated in writing to receive notices

Accounting and Auditing System. of noncompliance.

(3) A lessee, designee, reporter or The position title, department name and address, or individual name and The lessee, designee, reporter or

payor whose records are subject to address the lessee, designee, reporter or payor identifies in writing payor must notify MMS of any

audit. at the initiation of the audit; or the most recent addressee that the addressee changes.

lessee, designee, reporter or payor specified in writing; or an agent

designated in writing to receive notices of noncompliance.

(4) A reporter reporting on the The most recent position title, department name and address, or The lessee, designee, reporter or

``Report of Sales and Royalty individual name and address that the lessee, designee, reporter or payor is responsible for notifying

Remittance'' (Form MMS-2014). payor identifies in writing; or an agent designated in writing to RMP in writing of any addressee

receive notices of noncompliance. changes.

(5) A lessee, designee, reporter or The most recent position title, department name and address, or The lessee, designee, reporter or

payor who remits rental and bonuses individual name and address maintained in RMP records; or an agent payor is responsible for notifying

from nonproducing Federal leases. designated in writing to receive notices of noncompliance. RMP in writing of any addressee

changes.

--------------------------------------------------------------------------------------------------------------------------------------------------------

(c) We will serve Notices of Noncompliance by using registered mail

or personal service.

Sec. 241.52 What if I correct the violation?

The matter will be closed if you correct all of the violations

identified in the Notice of Noncompliance within 20 days after you

receive the Notice (or within a longer time period specified in the

Notice).

Sec. 241.53 What if I do not correct the violation?

(a) We may send you a Notice of Civil Penalty if you do not correct

all of the violations identified in the Notice of Noncompliance within

20 days after you receive the Notice of Noncompliance (or within a

longer time period specified in that Notice). The Notice of Civil

Penalty will tell you how much penalty you must pay. The penalty may be

up to $500 per day, beginning with the date of the Notice of

Noncompliance, for each violation identified in the Notice of

Noncompliance for as long as you do not correct the violations.

(b) If you do not correct all of the violations identified in the

Notice of Noncompliance within 40 days after you receive the Notice of

Noncompliance (or 20 days following the expiration of a longer time

period specified in that Notice), we may increase the penalty to up to

$5,000 per day, beginning with the date of the Notice of Noncompliance,

for each violation for as long as you do not correct the violations.

Sec. 241.54 How may I request a hearing on the record on a Notice of

Noncompliance?

You may request a hearing on the record on a Notice of

Noncompliance by filing a request within 30 days of the date you

received the Notice of Noncompliance with the Hearings Division

(Departmental), Office of Hearings and Appeals, U.S. Department of the

Interior, 4015 Wilson Boulevard, Arlington, Virginia 22203. You may do

this regardless of whether you correct the violations identified in the

Notice of Noncompliance.

Sec. 241.55 Does my request for a hearing on the record affect the

penalties?

(a) If you do not correct the violations identified in the Notice

of Noncompliance, the penalties will continue to accrue even if you

request a hearing on the record.

(b) You may petition the Hearings Division (Departmental) of the

Office of Hearings and Appeals, to stay the accrual of penalties

pending the hearing on the record and a decision by the Administrative

Law Judge under Sec. 241.72.

(1) You must file your petition within 45 calendar days of

receiving the Notice of Noncompliance.

(2) To stay the accrual of penalties, you must post a bond or other

surety instrument using the same standards and requirements as

prescribed in 30 CFR part 243, subpart B, or demonstrate financial

solvency using the same standards and requirements as prescribed in 30

CFR part 243, subpart C, for the principal amount of any unpaid amounts

due that are the subject of the Notice of Noncompliance, including

interest thereon, plus the amount of any penalties accrued before the

date a stay becomes effective.

(3) The Hearings Division will grant or deny the petition under 43

CFR 4.21(b).

Sec. 241.56 May I request a hearing on the record regarding the amount

of a civil penalty if I did not request a hearing on the Notice of

Noncompliance?

(a) You may request a hearing on the record to challenge only the

amount of a civil penalty when you receive a Notice of Civil Penalty,

if you did not previously request a hearing on the record under

Sec. 241.54. If you did not request a hearing on the record on the

Notice of Noncompliance under Sec. 241.54, you may not contest your

underlying liability for civil penalties.

(b) You must file your request within 10 days after you receive the

Notice of Civil Penalty with the Hearings Division (Departmental),

Office of Hearings and Appeals, U.S. Department of the Interior, 4015

Wilson Boulevard, Arlington, Virginia 22203.

Penalties Without a Period To Correct

Sec. 241.60 May I be subject to penalties without prior notice and an

opportunity to correct?

The Federal Oil and Gas Royalty Management Act sets out several

specific violations for which penalties accrue without an opportunity

to first correct the violation.

(a) Under 30 U.S.C. 1719(c), you may be subject to penalties of up

to $10,000 per day per violation for each day the violation continues

if you:

(1) Knowingly or willfully fail to make any royalty payment by the

date specified by statute, regulation, order or terms of the lease;

(2) Fail or refuse to permit lawful entry, inspection, or audit; or

(3) Knowingly or willfully fail or refuse to notify the Secretary,

within 5 business days after any well begins production on a lease site

or allocated to a lease site, or resumes production in the case of a

well which has been off

[[Page 26253]]

production for more than 90 days, of the date on which production has

begun or resumed.

(b) Under 30 U.S.C. 1719(d), you may be subject to civil penalties

of up to $25,000 per day for each day each violation continues if you:

(1) Knowingly or willfully prepare, maintain, or submit false,

inaccurate, or misleading reports, notices, affidavits, records, data,

or other written information;

(2) Knowingly or willfully take or remove, transport, use or divert

any oil or gas from any lease site without having valid legal authority

to do so; or

(3) Purchase, accept, sell, transport, or convey to another person,

any oil or gas knowing or having reason to know that such oil or gas

was stolen or unlawfully removed or diverted.

Sec. 241.61 How will MMS inform me of violations without a period to

correct?

We will inform you of violations without a period to correct by

issuing a Notice of Noncompliance explaining what the violation is and

how to correct it. We also will send you a Notice of Civil Penalty

stating the amount of the penalty. The Notice of Noncompliance and

Notice of Civil Penalty may be issued simultaneously. We will send the

Notice of Noncompliance and the Notice of Civil Penalty to your address

of record under Sec. 241.51(b) using the means of service specified

under Sec. 241.51(c).

Sec. 241.62 How may I request a hearing on the record on a Notice of

Noncompliance regarding violations without a period to correct?

You may request a hearing on the record of a Notice of

Noncompliance regarding violations without a period to correct by

filing a request within 30 days after you receive the Notice of

Noncompliance with the Hearings Division (Departmental), Office of

Hearings and Appeals, U.S. Department of the Interior, 4015 Wilson

Boulevard, Arlington, Virginia 22203. You may do this regardless of

whether you correct the violations identified in the Notice of

Noncompliance.

Sec. 241.63 Does my request for a hearing on the record affect the

penalties?

(a) If you do not correct the violations identified in the Notice

of Noncompliance regarding violations without a period to correct, the

penalties will continue to accrue even if you request a hearing on the

record.

(b) You may ask the Hearings Division (Departmental) to stay the

accrual of penalties pending the hearing on the record and a decision

by the Administrative Law Judge under Sec. 241.72.

(1) You must file your petition within 45 calendar days after you

receive the Notice of Noncompliance.

(2) To stay the accrual of penalties, you must post a bond or other

surety instrument using the same standards and requirements as

prescribed in 30 CFR part 243, subpart B, or demonstrate financial

solvency using the same standards and requirements as prescribed in 30

CFR part 243, subpart C, for the principal amount of any unpaid amounts

due that are the subject of the Notice of Noncompliance, including

interest thereon, plus the amount of any penalties accrued before the

date a stay becomes effective.

(3) The Hearings Division will grant or deny the petition under 43

CFR 4.21(b).

Sec. 241.64 May I request a hearing on the record regarding the amount

of a civil penalty if I did not request a hearing on the Notice of

Noncompliance?

(a) You may request a hearing on the record to challenge only the

amount of a civil penalty when you receive a Notice of Civil Penalty

regarding violations without a period to correct, if you did not

previously request a hearing on the record under Sec. 241.62. If you

did not request a hearing on the record on the Notice of Noncompliance

under Sec. 241.62, you may not contest your underlying liability for

civil penalties.

(b) You must file your request within 10 days after you receive

Notice of Civil Penalty with the Hearings Division (Departmental),

Office of Hearings and Appeals, U.S. Department of the Interior, 4015

Wilson Boulevard, Arlington, Virginia 22203.

General Provisions

Sec. 241.70 How does MMS decide what the amount of the penalty should

be?

We determine the amount of the penalty by considering the severity

of the violations, your history of compliance, and if you are a small

business.

Sec. 241.71 Does the penalty affect whether I owe interest?

(a) The penalties under this part are in addition to interest you

may owe on any underlying underpayments or unpaid debt.

(b) If you do not pay the penalty by the date required under

Sec. 241.75(d), MMS will assess you late payment interest on the

penalty amount at the same rate interest is assessed under 30 CFR

218.54.

Sec. 241.72 How will the Office of Hearings and Appeals conduct the

hearing on the record?

If you request a hearing on the record under Secs. 241.54, 241.56,

241.62 or 241.64, the hearing will be conducted by a Departmental

Administrative Law Judge from the Office of Hearings and Appeals. After

the hearing, the Administrative Law Judge will issue a decision in

accordance with the evidence presented and applicable law.

Sec. 241.73 How may I appeal the Administrative Law Judge's decision?

If you are adversely affected by the Administrative Law Judge's

decision, you may appeal that decision to the Interior Board of Land

Appeals under 43 CFR part 4, subpart E.

Sec. 241.74 May I seek judicial review of the decision of the Interior

Board of Land Appeals?

Under 30 U.S.C. 1719(j), you may seek judicial review of the

decision of the Interior Board of Land Appeals. A suit for judicial

review in the District Court will be barred unless filed within 90 days

after the final order.

Sec. 241.75 When must I pay the penalty?

(a) You must pay the amount of the Notice of Civil Penalty issued

under Secs. 241.53 or 241.61, if you do not request a hearing on the

record under Sec. 241.54, Sec. 241.56, Sec. 241.62, or Sec. 241.64.

(b) If you request a hearing on the record under Sec. 241.54,

Sec. 241.56, Sec. 241.62, or Sec. 241.64, but you do not appeal the

determination of the Administrative Law Judge to the Interior Board of

Land Appeals under Sec. 241.73, you must pay the amount assessed by the

Administrative Law Judge.

(c) If you appeal the determination of the Administrative Law Judge

to the Interior Board of Land Appeals, you must pay the amount assessed

in the IBLA decision.

(d) You must pay the penalty assessed within 40 days after:

(1) You received the Notice of Civil Penalty, if you did not

request a hearing on the record under either Sec. 241.54, Sec. 241.56,

Sec. 241.62, or Sec. 241.64;

(2) You received an Administrative Law Judge's decision under

Sec. 241.72, if you obtained a stay of the accrual of penalties pending

the hearing on the record under Sec. 241.55(b) or Sec. 241.63(b) and

did not appeal the Administrative Law Judge's determination to the IBLA

under Sec. 241.73;

(3) You received an IBLA decision under Sec. 241.73 if the IBLA

continued the stay of accrual of penalties pending its decision and you

did not seek judicial review of the IBLA's decision; or

[[Page 26254]]

(4) A final non-appealable judgment of a court of competent

jurisdiction is entered, if you sought judicial review of the IBLA's

decision and the Department or the appropriate court suspended

compliance with the IBLA's decision pending the adjudication of the

case.

(e) If you do not pay, that amount is subject to collection under

the provisions of Sec. 241.77.

Sec. 241.76 Can MMS reduce my penalty once it is assessed?

Under 30 U.S.C. 1719(g), the Director or his or her delegate may

compromise or reduce civil penalties assessed under this part.

Sec. 241.77 How may MMS collect the penalty?

(a) MMS may use all available means to collect the penalty

including, but not limited to:

(1) Requiring the lease surety, for amounts owed by lessees, to pay

the penalty;

(2) Deducting the amount of the penalty from any sums the United

States owes to you; and

(3) Using judicial process to compel your payment under 30 U.S.C.

1719(k).

(b) If the Department uses judicial process, or if you seek

judicial review under Sec. 241.74 and the court upholds assessment of a

penalty, the court shall have jurisdiction to award the amount assessed

plus interest assessed from the date of the expiration of the 90-day

period referred to in Sec. 241.74. The amount of any penalty, as

finally determined, may be deducted from any sum owing to you by the

United States.

Criminal Penalties

Sec. 241.80 May the United States criminally prosecute me for

violations under Federal and Indian oil and gas leases?

If you commit an act for which a civil penalty is provided at 30

U.S.C. 1719(d) and Sec. 241.60(b), the United States may pursue

criminal penalties as provided at 30 U.S.C. 1720, in addition to any

authority for prosecution under other statutes.

8. The heading of part 242 is revised to read as follows.

PART 242--ORDERS [RESERVED]

9. Part 243 is revised to read as follows:

PART 243--SUSPENSIONS PENDING APPEAL AND BONDING--ROYALTY

MANAGEMENT PROGRAM

Subpart A--General Provisions

Sec.

243.1 What is the purpose of this part?

243.2 What leases are subject to this part?

243.3 What definitions apply to this part?

243.4 How do I suspend compliance with an order?

243.5 May another person post a bond or other surety instrument or

demonstrate financial solvency on my behalf?

243.6 When must I or another person meet the bonding or financial

solvency requirements under this part?

243.7 What must a person do when posting a bond or other surety

instrument or demonstrating financial solvency on behalf of an

appellant?

243.8 When will MMS suspend my obligation to comply with an order?

243.9 Will MMS continue to suspend my obligation to comply with an

order if I seek judicial review in a Federal court?

243.10 When will MMS collect against a bond or other surety

instrument or a person demonstrating financial solvency?

243.11 May I appeal the MMS bond-approving officer's determination

of my surety amount or financial solvency?

243.12 May I substitute a demonstration of financial solvency for a

bond posted before the effective date of this rule?

Subpart B--Bonding Requirements

243.100 What standards must my MMS-specified surety instrument

meet?

243.101 How will MMS determine the amount of my bond or other

surety instrument?

Subpart C--Financial Solvency Requirements

243.200 How do I demonstrate financial solvency?

243.201 How will MMS determine if I am financially solvent?

243.202 When will MMS monitor my financial solvency?

Authority: 5 U.S.C. 301 et seq.; 25 U.S.C. 396 et seq., 396a et

seq., 2101 et seq.; 30 U.S.C. 181 et seq., 351 et seq., 1001 et

seq., 1701 et seq.; 31 U.S.C. 9701; 43 U.S.C. 1301 et seq., 1331 et

seq., and 1801 et seq.

Subpart A--General Provisions

Sec. 243.1 What is the purpose of this part?

This part applies to you if you are a lessee or recipient of an

order. This part explains:

(a) How you may suspend compliance with an order that you (or your

designee if you are a lessee) have appealed under 30 CFR part 290 in

effect prior to May 13, 1999 and contained in the 30 CFR, parts 200 to

699, edition revised as of July 1, 1998, or under 30 CFR part 290,

subpart b; and

(b) When you or another person acting on your behalf must submit a

bond or other surety or demonstrate financial solvency.

Sec. 243.2 What leases are subject to this part?

This part applies to all Federal mineral leases onshore and on the

Outer Continental Shelf (OCS), and to all federally-administered

mineral leases on Indian tribal and individual Indian mineral owners'

lands.

Sec. 243.3 What definitions apply to this part?

Assessment means any fee or charge levied or imposed by the

Secretary or a delegated State other than:

(1) The principal amount of any royalty, minimum royalty, rental,

bonus, net profit share or proceed of sale;

(2) Any interest; or

(3) Any civil or criminal penalty.

Designee means the person designated by a lessee under Sec. 218.52

of this chapter to make all or part of the royalty or other payments

due on a lease on the lessee's behalf.

Lessee means any person to whom the United States, or the United

States on behalf of an Indian tribe or individual Indian mineral owner,

issues a lease, or any person to whom all or part of the lessee's

interest or operating rights in a lease has been assigned.

MMS bond-approving officer means the Associate Director for Royalty

Management or an official to whom the Associate Director delegates that

responsibility.

MMS-specified surety instrument means an MMS-specified

administrative appeal bond, an MMS-specified irrevocable letter of

credit, a Treasury book-entry bond or note, or a financial institution

book-entry certificate of deposit.

Notice of order means the notice that MMS or a delegated State

issues to a lessee that informs the lessee that MMS or the delegated

State has issued an order to the lessee's designee.

Order means an order appealable under 30 CFR part 290 in effect

prior to May 13, 1999 and contained in the 30 CFR, parts 200 to 699,

edition revised as of July 1, 1998, under 30 CFR part 290 subpart B, or

under 30 CFR part 208.

Person means any individual, firm, corporation, association,

partnership, consortium, or joint venture.

Sec. 243.4 How do I suspend compliance with an order?

(a) If you timely appeal an order, and if that order or portion of

that order:

(1) Requires you to make a payment, and you want to suspend

compliance with that order, you must post a bond or other surety

instrument or demonstrate financial solvency under this part, except as

provided in paragraph (b) of this section; or

(2) Does not require you to make a payment, compliance with that

order is

[[Page 26255]]

suspended when you meet all requirements to file that appeal.

(b) You need not meet the requirements of paragraph (a) of this

section if:

(1) The order is an assessment; or

(2) Another person agrees to fulfill these requirements on your

behalf under Sec. 243.5.

Sec. 243.5 May another person post a bond or other surety instrument

or demonstrate financial solvency on my behalf?

Any other person, including a designee, payor, or affiliate, may

post a bond or other surety instrument or demonstrate financial

solvency under this part on behalf of an appellant required to post a

bond or other surety instrument under Sec. 243.4(a)(1).

Sec. 243.6 When must I or another person meet the bonding or financial

solvency requirements under this part?

If you must meet the bonding or financial solvency requirements

under Sec. 243.4(a)(1), or if another person is meeting your bonding or

financial solvency requirements, then either you or the other person

must post a bond or other surety instrument or demonstrate financial

solvency within 60 days after you receive the order or the Notice of

Order.

Sec. 243.7 What must a person do when posting a bond or other surety

instrument or demonstrating financial solvency on behalf of an

appellant?

If you assume an appellant's responsibility to post a bond or other

surety instrument or demonstrate financial solvency under Sec. 243.5,

you:

(a) Must notify MMS in writing at the address specified in

Sec. 243.200(a) that you are assuming the appellant's responsibility

under this part;

(b) May not assert that you are not otherwise liable for royalties

or other payments under 30 U.S.C. 1712(a), or any other theory, as a

defense if MMS calls your bond or requires you to pay based on your

demonstration of financial solvency; and

(c) May end your voluntarily-assumed responsibility for posting a

bond or other surety instrument only after the appellant under this

part either:

(1) Pays or posts a bond or other surety instrument; or

(2) Demonstrates financial solvency.

Sec. 243.8 When will MMS suspend my obligation to comply with an

order?

(a) Federal leases. Subject to paragraph (d) of this section, if

you appeal an order regarding the payment and reporting of royalties

and other payments due from Federal mineral leases onshore or on the

Outer Continental Shelf (OCS), and:

(1) If the amount under appeal is less than $10,000 or does not

require payment of a specified amount, MMS will suspend your obligation

to comply with the order. MMS will use the lease surety posted with the

Bureau of Land Management for onshore leases, and MMS for OCS leases,

as collateral for the obligation; or

(2) If the amount under appeal is $10,000 or more, MMS will suspend

your obligation to comply with that order if you:

(i) Submit an MMS-specified surety instrument under subpart B of

this part within a time period MMS prescribes; or

(ii) Demonstrate financial solvency under subpart C.

(b) Indian leases. Subject to paragraph (d) of this section, if you

appeal an order regarding the payment and reporting of royalties and

other payments due from Indian mineral leases subject to this part,

and:

(1) If the amount under appeal is less than $1,000 or does not

require payment, MMS will suspend your obligation to comply with the

order. MMS will use the lease surety posted with the Bureau of Indian

Affairs as collateral for the obligation; or

(2) If the amount under appeal is $1,000 or more, MMS will suspend

your obligation to comply with that order if you submit an MMS-

specified surety instrument under subpart B of this part within a time

period MMS prescribes.

(c) Nothing in this part prohibits you from paying any demanded

amount or complying with any other requirement pending appeal. However,

voluntarily paying any demanded amount or otherwise complying with any

other requirement when suspension of an order is otherwise available

under these rules does not create judicially reviewable final agency

action under 5 U.S.C. 704.

(d) Regardless of the amount under appeal, MMS may inform you that

it will not suspend your obligation to comply with the order under

paragraph (a) or (b) of this section because suspension would harm the

interests of the United States or the Indian lessor.

Sec. 243.9 Will MMS continue to suspend my obligation to comply with

an order if I seek judicial review in a Federal court?

(a) If you seek judicial review of an IBLA decision or other final

action of the Department of the Interior regarding an order, MMS will

suspend your obligation to comply with that order pending judicial

review if you continue to meet the requirements of this part.

(b) Notwithstanding the provisions of paragraph (a) of this

section, MMS may decide that it will not suspend your obligation to

comply with an order. MMS will notify you in writing of that decision

and the reasons for it.

Sec. 243.10 When will MMS collect against a bond or other surety

instrument or a person demonstrating financial solvency?

(a) This section applies to you if, for an appeal of an order under

this part, you:

(1) Maintain a bond or an MMS-specified surety instrument on your

own behalf or for another person; or

(2) Have demonstrated financial solvency on your own behalf or for

another person.

(b) MMS may initiate collection against the bond or other surety

instrument or the person demonstrating financial solvency:

(1) If the MMS Director or the Deputy Commissioner of Indian

Affairs decides your appeal adversely to you and you do not pay the

amount due or appeal that decision to the IBLA under 43 CFR part 4,

subpart E;

(2) If the IBLA, the Director of the Office of Hearings and

Appeals, an Assistant Secretary, or the Secretary decides your appeal

adversely to you, and you do not pay the amount due or pursue judicial

review within 90 days of the decision;

(3) If a court of competent jurisdiction issues a final non-

appealable decision adverse to you, and you do not pay the amount due

within 30 days of the decision;

(4) If you do not increase the amount of your bond or other surety

instrument as required under Sec. 243.101(b), or otherwise fail to

maintain an adequate surety instrument in effect, and you do not pay

the amount due under the order within 30 days of notice from MMS under

Sec. 243.101(b);

(5) If the obligation to comply with an order or decision is not

suspended under Sec. 243.8 or Sec. 243.9 and you do not pay the amount

required under the order or decision; or

(6) If the MMS bond-approving officer determines that you are no

longer financially solvent under Sec. 243.202(c), and you do not pay

the order amount or post a bond or other MMS-specified surety

instrument under subpart B within 30 days of that determination.

Sec. 243.11 May I appeal the MMS bond-approving officer's

determination of my surety amount or financial solvency?

Any decision on your surety amount under subpart B or your

financial solvency under subpart C is final and is not subject to

appeal.

[[Page 26256]]

Sec. 243.12 May I substitute a demonstration of financial solvency for

a bond posted before the effective date of this rule?

If you appealed an order before June 14, 1999 and you submitted an

MMS-specified surety instrument to suspend compliance with that order,

you may replace the surety with a demonstration of financial solvency

under this part at an administratively convenient time, such as when

the surety instrument is due for renewal.

Subpart B--Bonding Requirements

Sec. 243.100 What standards must my MMS-specified surety instrument

meet?

(a) An MMS-specified surety instrument must be in a form specified

in MMS instructions. MMS will give you written information and standard

forms for MMS-specified surety instrument requirements.

(b) MMS will use a bank-rating service to determine whether a

financial institution has an acceptable rating to provide a surety

instrument adequate to indemnify the lessor from loss or damage.

(1) Administrative appeal bonds must be issued by a qualified

surety company which the Department of the Treasury has approved.

(2) Irrevocable letters of credit or certificates of deposit must

be from a financial institution acceptable to MMS with a minimum 1-year

period of coverage subject to automatic renewal up to 5 years.

Sec. 243.101 How will MMS determine the amount of my bond or other

surety instrument?

(a) The MMS bond-approving officer may approve your surety if he or

she determines that the amount is adequate to guarantee payment. The

amount of your surety may vary depending on the form of the surety and

how long the surety is effective.

(1) The amount of the MMS-specified surety instrument must include

the principal amount owed under the order plus any accrued interest we

determine is owed plus projected interest for a 1-year period.

(2) Treasury book-entry bond or note amounts must be equal to at

least 120 percent of the required surety amount.

(b) If your appeal is not decided within 1 year from the filing

date, you must increase the surety amount to cover additional estimated

interest for another 1-year period. You must continue to do this

annually on the date your appeal was filed. We will determine the

additional estimated interest and notify you of the amount so you can

amend your surety instrument.

(c) You may submit a single surety instrument that covers multiple

appeals. You may change the instrument to add new amounts under appeal

or remove amounts that have been adjudicated in your favor or that you

have paid if you:

(1) Amend the single surety instrument annually on the date you

filed your first appeal; and

(2) Submit a separate surety instrument for new amounts under

appeal until you amend the instrument to cover the new appeals.

Subpart C--Financial Solvency Requirements

Sec. 243.200 How do I demonstrate financial solvency?

(a) To demonstrate financial solvency under this part, you must

submit an audited consolidated balance sheet, and, if requested by the

MMS bond-approving officer, up to 3 years of tax returns to the MMS,

Debt Collection Section using:

(1) The U.S. Postal Service or private delivery at P.O. Box 5760,

MS 3031, Denver, CO 80217-5760; or

(2) Courier or overnight delivery at MS 3031, Denver Federal

Center, Bldg. 85, Room A-212, Denver, CO 80225-0165.

(b) You must submit an audited consolidated balance sheet annually,

and, if requested, additional annual tax returns on the date MMS first

determined that you demonstrated financial solvency as long as you have

active appeals, or whenever MMS requests.

(c) If you demonstrate financial solvency in the current calendar

year, you are not required to redemonstrate financial solvency for new

appeals of orders during that calendar year unless you file for

protection under any provision of the U.S. Bankruptcy Code (Title 11 of

the United States Code), or MMS notifies you that you must

redemonstrate financial solvency.

Sec. 243.201 How will MMS determine if I am financially solvent?

(a) The MMS bond-approving officer will determine your financial

solvency by examining your total net worth, including, as appropriate,

the net worth of your affiliated entities.

(b) If your net worth, minus the amount we would require as surety

under subpart B for all orders you have appealed is greater than $300

million, you are presumptively deemed financially solvent, and we will

not require you to post a bond or other surety instrument.

(c) If your net worth, minus the amount we would require as surety

under subpart B for all orders you have appealed is less than $300

million, you must submit the following to the MMS Debt Collection

Section by one of the methods in Sec. 243.200(a):

(1) A written request asking us to consult a business-information,

or credit-reporting service or program to determine your financial

solvency; and

(2) A nonrefundable $50 processing fee:

(i) You must pay the processing fee to us following the

requirements for making payments found in 30 CFR 218.51. You are not

required to use Electronic Funds Transfer (EFT) for these payments;

(ii) You must submit the fee with your request under paragraph

(c)(1) of this section, and then annually on the date we first

determined that you demonstrated financial solvency, as long as you are

not able to demonstrate financial solvency under paragraph (a) of this

section and you have active appeals.

(d) If you request that we consult a business-information or

credit-reporting service or program under paragraph (c) of this

section:

(1) We will use criteria similar to that which a potential creditor

would use to lend an amount equal to the bond or other surety

instrument we would require under subpart B;

(2) For us to consider you financially solvent, the business-

information or credit-reporting service or program must demonstrate

your degree of risk as low to moderate:

(i) If our bond-approving officer determines that the business-

information or credit-reporting service or program information

demonstrates your financial solvency to our satisfaction, our bond-

approving officer will not require you to post a bond or other surety

instrument under subpart B;

(ii) If our bond-approving officer determines that the business-

information or credit-reporting service or program information does not

demonstrate your financial solvency to our satisfaction, our bond-

approving officer will require you to post a bond or other surety

instrument under subpart B or pay the obligation.

Sec. 243.202 When will MMS monitor my financial solvency?

(a) If you are presumptively financially solvent under

Sec. 243.201(b), MMS will determine your net worth as described under

Secs. 243.201(b) and (c) to evaluate your financial solvency at least

annually on the date we first determined that you demonstrated

financial solvency as long as you have

[[Page 26257]]

active appeals and each time you appeal a new order.

(b) If you ask us to consult a business-information or credit-

reporting service or program under Sec. 243.201(c), we will consult a

service or program annually as long as you have active appeals and each

time you appeal a new order.

(c) If our bond-approving officer determines that you are no longer

financially solvent, you must post a bond or other MMS-specified surety

instrument under subpart B.

PART 250--OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER

CONTINENTAL SHELF

10. The authority citation for part 250 continues to read as

follows:

Authority: 43 U.S.C. 1331, et seq.

10a. Section 250.1409 is revised to read as follows:

Sec. 250.1409 What are my appeal rights?

(a) When you receive the Reviewing Officer's final decision, you

have 60 days to either pay the penalty or file an appeal in accordance

with 30 CFR part 290, subpart A.

(b) If you file an appeal, you must either:

(1) Submit a surety bond in the amount of the penalty to the

Regional Adjudication Office in the Region where the penalty was

assessed, following instructions that the Reviewing Officer will

include in the final decision; or

(2) Notify the Regional Adjudication Office, in the Region where

the penalty was assessed, that you want your lease-specific/area-wide

bond on file to be used as the bond for the penalty amount.

(c) If you choose the alternative in paragraph (b)(2) of this

section, the Regional Director may require additional security (i.e.,

security in excess of your existing bond) to ensure sufficient coverage

during an appeal. In that event, the Regional Director will require you

to post the supplemental bond with the regional office in the same

manner as under Secs. 256.53(d) through (f) of this chapter. If the

Regional Director determines the appeal should be covered by a lease-

specific abandonment account then you must establish an account that

meets the requirements of Sec. 256.56.

(d) If you do not either pay the penalty or file a timely appeal,

MMS will take one or more of the following actions:

(1) We will collect the amount you were assessed, plus interest,

late payment charges, and other fees as provided by law, from the date

you received the Reviewing Officer's final decision until the date we

receive payment;

(2) We may initiate additional enforcement, including, if

appropriate, cancellation of the lease, right-of-way, license, permit,

or approval, or the forfeiture of a bond under this part; or

(3) We may bar you from doing further business with the Federal

Government according to Executive Orders 12549 and 12689, and section

2455 of the Federal Acquisition Streamlining Act of 1994, 31 U.S.C.

6101. The Department of the Interior's regulations implementing these

authorities are found at 43 CFR part 62, subpart D.

11. Part 290 of subchapter C is revised to read as follows:

PART 290--APPEAL PROCEDURES

Subpart A--Offshore Minerals Management Appeal Procedures

Sec.

290.1 What is the purpose of this subpart?

290.2 Who may appeal?

290.3 What is the time limit for filing an appeal?

290.4 How do I file an appeal?

290.5 Can I obtain an extension for filing my Notice of Appeal?

290.6 Are informal resolutions permitted?

290.7 Do I have to comply with the decision or order while my

appeal is pending?

290.8 How do I exhaust my administrative remedies?

Subpart B--Appeals of Royalty Management Program and Delegated State

Orders

290.100 What is the purpose of this subpart?

290.101 What leases are subject to this subpart?

290.102 What definitions apply to this subpart?

290.103 Who may file an appeal?

290.104 What may I not appeal under this subpart?

290.105 How do I appeal an order?

290.106 How do lessees join a designee's appeal and how does

joinder affect the appeal?

290.107 Where are the rules concerning the effect of the Department

not issuing a decision in my appeal within the statutory time frame?

290.108 How do I appeal to the IBLA?

290.109 How do I request an extension of time?

Authority: 5 U.S.C. 301 et seq.; 43 U.S.C. 1331 et seq.

Subpart A--Offshore Minerals Management Appeal Procedures

Sec. 290.1 What is the purpose of this subpart?

The purpose of this subpart is to explain the procedures for

appeals of Minerals Management Service (MMS) Offshore Minerals

Management (OMM) decisions and orders issued under subchapter B.

Sec. 290.2 Who may appeal?

If you are adversely affected by an OMM official's final decision

or order issued under 30 CFR chapter II, subchapter B, you may appeal

that decision or order to the Interior Board of Land Appeals (IBLA).

Your appeal must conform with the procedures found in this subpart and

43 CFR part 4, subpart E. A request for reconsideration of an MMS

decision concerning a lease bid, authorized in 30 CFR 256.47(e)(3) and

281.21(a)(1), or a deep water field determination, authorized in 30 CFR

203.79(a) and 30 CFR 260.110(d)(2), is not subject to the procedures

found in this part.

Sec. 290.3 What is the time limit for filing an appeal?

You must file your appeal within 60 days after you receive OMM's

final decision or order. The 60-day time period applies rather than the

time period provided in 43 CFR 4.411(a). A decision or order is

received on the date you sign a receipt confirming delivery or, if

there is no receipt, the date otherwise documented.

Sec. 290.4 How do I file an appeal?

For your appeal to be filed, MMS must receive all of the following

within 60 days after you receive the decision or order:

(a) A written Notice of Appeal together with a copy of the decision

or order you are appealing in the office of the OMM officer that issued

the decision or order. You cannot extend the 60-day period for that

office to receive your Notice of Appeal; and

(b) A nonrefundable processing fee of $150 paid with the Notice of

Appeal.

(1) Identify the order you are appealing on the check or other form

of payment you use to pay the processing fee.

(2) You cannot extend the 60-day period for payment of the

processing fee.

(3) You must pay the processing fee to MMS following the

requirements for making payments found in 30 CFR 218.51. You are not

required to use Electronic Funds Transfer (EFT) for these payments.

Sec. 290.5 Can I obtain an extension for filing my Notice of Appeal?

You cannot obtain an extension of time to file the Notice of

Appeal. See 43 CFR 4.411(c).

[[Page 26258]]

Sec. 290.6 Are informal resolutions permitted?

(a) You may seek informal resolution with the issuing officer's

next level supervisor during the 60-day period established in

Sec. 290.3.

(b) Nothing in this subpart precludes resolution by settlement of

any appeal or matter pending in the administrative process after the

60-day period established in Sec. 290.3.

Sec. 290.7 Do I have to comply with the decision or order while my

appeal is pending?

(a) The decision or order is effective during the 60-day period for

filing an appeal under Sec. 290.3 unless:

(1) OMM notifies you that the decision or order, or some portion of

it, is suspended during this period because there is no likelihood of

immediate and irreparable harm to human life, the environment, any

mineral deposit, or property; or

(2) You post a surety bond under 30 CFR 250.1409 pending the appeal

challenging an order to pay a civil penalty.

(b) This section applies rather than 43 CFR 4.21(a) for appeals of

OMM orders.

(c) After you file your appeal, IBLA may grant a stay of a decision

or order under 43 CFR 4.21(b); however, a decision or order remains in

effect until IBLA grants your request for a stay of the decision or

order under appeal.

Sec. 290.8 How do I exhaust my administrative remedies?

(a) If you receive a decision or order issued under chapter II,

subchapter B, you must appeal that decision or order to IBLA under 43

CFR part 4, subpart E to exhaust administrative remedies.

(b) This section does not apply if the Assistant Secretary for Land

and Minerals Management or the IBLA makes a decision or order

immediately effective notwithstanding an appeal.

Subpart B--Appeals of Royalty Management Program and Delegated

States Orders

Sec. 290.100 What is the purpose of this subpart?

This subpart tells you how to appeal Minerals Management Service

(MMS) or delegated State orders concerning reporting to the MMS Royalty

Management Program (RMP) and the payment of royalties and other

payments due under leases subject to this subpart.

Sec. 290.101 What leases are subject to this subpart?

This subpart applies to:

(a) All Federal mineral leases onshore and on the Outer Continental

Shelf (OCS); and

(b) All federally-administered mineral leases on Indian tribal and

individual Indian mineral owners' lands, regardless of the statutory

authority under which the lease was issued or maintained.

Sec. 290.102 What definitions apply to this subpart?

Assessment means any fee or charge levied or imposed by the

Secretary or a delegated State other than:

(1) The principal amount of any royalty, minimum royalty, rental,

bonus, net profit share or proceed of sale;

(2) Any interest; or

(3) Any civil or criminal penalty.

Delegated State means a State to which MMS has delegated authority

to perform royalty management functions under an agreement or

agreements under regulations at 30 CFR part 227.

Designee means the person designated by a lessee under 30 CFR

218.52 to make all or part of the royalty or other payments due on a

lease on the lessee's behalf.

IBLA means the Interior Board of Land Appeals.

Indian lessor means an Indian tribe or individual Indian mineral

owner with a beneficial or restricted interest in a property that is

subject to a lease issued or administered by the Secretary on behalf of

the tribe or individual Indian mineral owner.

Lease means any agreement authorizing exploration for or extraction

of any mineral, regardless of whether the instrument is expressly

denominated as a ``lease,'' including any:

(1) Contract;

(2) Net profit share arrangement;

(3) Joint venture; or

(4) Agreement the Secretary approves under the Indian Mineral

Development Act, 25 U.S.C. 2101 et seq.

Lessee means any person to whom the United States, or the United

States on behalf of an Indian tribe or individual Indian mineral owner,

issues a lease subject to this subpart, or any person to whom all or

part of the lessee's interest or operating rights in a lease subject to

this subpart has been assigned.

Notice of Order means the notice that MMS or a delegated State

issues to a lessee that informs the lessee that MMS or the delegated

State has issued an order to the lessee's designee.

Obligation means:

(1) A lessee's, designee's or payor's duty to:

(i) Deliver oil or gas royalty in kind; or

(ii) Make a lease-related payment, including royalty, minimum

royalty, rental, bonus, net profit share, proceeds of sale, interest,

penalty, civil penalty, or assessment; and

(2) The Secretary's duty to:

(i) Take oil or gas royalty-in-kind; or

(ii) Make a lease-related payment, refund, offset, or credit,

including royalty, minimum royalty, rental, bonus, net profit share,

proceeds of sale, or interest.

(3) The obligations identified in paragraphs (1)(i) and (2)(i) of

this definition are nonmonetary obligations. The obligations identified

in paragraphs (1)(ii) and (2)(ii), including the requirement to compute

the amount of such obligations, are monetary obligations.

Order for purposes of this subpart only, means any document issued

by the MMS Director, MMS RMP, or a delegated State that contains

mandatory or ordering language that requires the recipient to do any of

the following for any lease subject to this subpart: report, compute,

or pay royalties or other obligations, report production, or provide

other information.

(1) Order includes:

(i) An order to pay or to compute and pay; and

(ii) An MMS or delegated State decision to deny a lessee's,

designee's, or payor's written request that asserts an obligation due

the lessee, designee or payor.

(2) Order does not include:

(i) A non-binding request, information, or guidance, such as:

(A) Advice or guidance on how to report or pay, including a

valuation determination, unless it contains mandatory or ordering

language; and

(B) A policy determination;

(ii) A subpoena;

(iii) An order to pay that MMS issues to a refiner or other person

involved in disposition of royalty taken in kind; or

(iv) A Notice of Noncompliance or a Notice of Civil Penalty issued

under 30 U.S.C. 1719 and 30 CFR part 241, or a decision of an

administrative law judge or of the IBLA following a hearing on the

record on a Notice of Noncompliance or Notice of Civil Penalty.

Party means MMS, any person who files a Notice of Appeal, and any

person who files a Notice of Joinder in an appeal under this subpart.

Sec. 290.103 Who may file an appeal?

(a) If you receive an order that adversely affects you or your

lessee, you may appeal that order except as provided under

Sec. 290.104.

(b) If you are a lessee and you receive a Notice of Order, and if

you contest the order, you may either appeal the order

[[Page 26259]]

or join in your designee's appeal under Sec. 290.106.

Sec. 290.104 What may I not appeal under this subpart?

You may not appeal:

(a) An action that is not an order, as defined in this subpart; or

(b) A determination of the surety amount or financial solvency

under 30 CFR part 243, subparts B or C.

Sec. 290.105 How do I appeal an order?

(a) You may appeal an order to the Director, Minerals Management

Service (MMS Director), by filing a Notice of Appeal in the office of

the official issuing the order within 30 days from service of the

order.

(1) Within the same 30-day period, you must file in the office of

the official issuing the order a statement of reasons or written

arguments or briefs that include the arguments on the facts or laws

that you believe justify reversal or modification of the order.

(2) If you are a designee, when you file your Notice of Appeal you

must serve your Notice of Appeal on the lessees for the leases in the

order you appealed.

(b) You may not request and will not receive an extension of time

for filing the Notice of Appeal.

(c) If the office of the official issuing the order does not

receive the Notice of Appeal within the time provided in paragraph (a)

of this section, the Notice of Appeal will be considered timely if the

office of the official issuing the order receives:

(1) The Notice of Appeal not later than 10 days after the required

filing date; and

(2) The officer with whom the Notice of Appeal must be filed

determines that the Notice of Appeal was transmitted to the proper

office before the filing deadline in paragraph (a) of this section.

(d) If the Notice of Appeal is filed after the grace period

provided in paragraph (c) of this section and was not transmitted to

the proper office before the filing deadline in paragraph (a) of this

section, the MMS Director will not consider the Notice of Appeal and

the case will be closed.

(e) The officer with whom the Notice of Appeal is filed will send

the appeal and accompanying papers to the MMS Director.

(f) The MMS Director will review the record and render a decision

in the case.

(g) If an order involves Indian leases, the Deputy Commissioner of

Indian Affairs will exercise the functions vested in the MMS Director.

Sec. 290.106 How do lessees join a designee's appeal and how does

joinder affect the appeal?

(a) If you are a lessee, and your designee files an appeal under

Sec. 290.103, you may join in that appeal within 30 days after you

receive your designee's Notice of Appeal under Sec. 290.105(a)(2) by

filing a Notice of Joinder with the office or official that issued the

order.

(b) If you join in an appeal under paragraph (a) of this section,

you are deemed to appeal the order jointly with the designee, but the

designee must fulfill all requirements imposed on appellants under this

subpart and 43 CFR part 4, subparts E and J. You may not file

submissions or pleadings separately from the designee.

(c) If you are a lessee and you neither appeal nor join in your

designee's appeal under this section, your designee's actions with

respect to the appeal and any decisions in the appeal bind you.

(d) If you are a designee and you decide to discontinue

participation in the appeal, you must serve written notice within 30

days before the next submission or pleading is due on:

(1) All lessees who have joined in the appeal under paragraph (a)

of this section;

(2) The office or officer with whom any subsequent submissions or

pleadings must be filed, including the IBLA; and

(3) All other parties to the appeal.

(e) If you have joined in the appeal under paragraph (a) of this

section, and if the designee notifies you under paragraph (d) of this

section that it declines to further pursue the appeal, you become an

appellant and must then meet all requirements of this subpart and 43

CFR part 4, subparts E and J, as the appellant.

Sec. 290.107 Where are the rules concerning the effect of the

Department not issuing a decision in my appeal within the statutory

time frame?

If your appeal involves monetary or nonmonetary obligations under

Federal oil and gas leases, the rules concerning the effect of the

Department not issuing a final decision in your appeal within the 33-

month period prescribed under 30 U.S.C. 1724(h) are located in 43 CFR

part 4, subpart J.

Sec. 290.108 How do I appeal to the IBLA?

Any party to a case adversely affected by a final decision of the

MMS Director or the Deputy Commissioner of Indian Affairs under this

subpart shall have a right of appeal to the IBLA under the procedures

provided in 43 CFR part 4, subpart E.

Sec. 290.109 How do I request an extension of time?

(a) If you are a party to an appeal under this subpart, and you

need additional time after the appeal commences under 43 CFR 4.904 for

any purpose:

(1) You may obtain an extension of time under this section; and

(2) You must submit a written request for an extension of time to:

(i) The office or official with whom you must file a document

before the required filing date; or

(ii) If you are not seeking an extension of time to file a

document, to the office or official before whom the appeal is pending.

(b) If you are an appellant, and if your appeal involves monetary

or nonmonetary obligations under Federal oil and gas leases, you must

agree in writing in your request to extend the period in which the

Department must issue a final decision in your appeal under 30 U.S.C.

1724(h) and 43 CFR 4.906, by the amount of time for which you are

requesting an extension.

(c) If you are any other party to an appeal involving monetary or

nonmonetary obligations under Federal oil and gas leases, the office or

official with whom you must file the request may require you to submit

a written agreement signed by the appellant to extend the period in

which the Department must issue a final decision in the appeal under 43

CFR 4.906, by the amount of time for which you are requesting an

extension.

(d) The office or official with whom you must file your request may

decline any request for an extension of time.

(e) You must serve your request on all parties to the appeal.

43 CFR PART 4--DEPARTMENT HEARINGS AND APPEALS PROCEDURES

13. The authority citation for part 4 continues to read as follows:

Authority: R.S. 2478, as amended, 43 U.S.C. sec. 1201, unless

otherwise noted.

14. In 43 CFR part 4, subpart J is added to read as follows.

Subpart J--Special Rules Applicable to Appeals Concerning Federal Oil

and Gas Royalties and Related Matters

4.901 What is the purpose of this subpart?

4.902 What appeals are subject to this subpart?

4.903 What definitions apply to this subpart?

4.904 When does my appeal commence and end?

4.905 What if a due date falls on a day the Department or relevant

office is not open for business?

[[Page 26260]]

4.906 What if the Department does not issue a decision by the date

my appeal ends?

4.907 What if an IBLA decision requires MMS or a delegated State to

recalculate royalties or other payments?

4.908 What is the administrative record for my appeal if it is

deemed decided?

4.909 How do I request an extension of time?

Authority: 5 U.S.C. 301 et seq.; 25 U.S.C. 396 et seq., 396a et

seq., 2101 et seq.; 30 U.S.C. 181 et seq., 351 et seq., 1001 et

seq., 1701 et seq.; 31 U.S.C 9701; 43 U.S.C. 1301 et seq., 1331 et

seq., and 1801 et seq.

Subpart J--Special Rules Applicable to Appeals Concerning Federal

Oil and Gas Royalties and Related Matters

Sec. 4.901 What is the purpose of this subpart?

This subpart tells you how the time limits of 30 U.S.C. 1724(h)

apply to appeals subject to this subpart.

Sec. 4.902 What appeals are subject to this subpart?

(a) This subpart applies to appeals under 30 CFR part 290 in effect

prior to May 13, 1999 and contained in the 30 CFR, parts 200 to 699,

edition revised as of July 1, 1998, 30 CFR part 290 subpart B, and 43

CFR part 4, subpart E, of Minerals Management Service (MMS) or

delegated State orders or portions of orders concerning payment (or

computation and payment) of royalties and other payments due, and

delivery or taking of royalty in kind, under Federal oil and gas

leases.

(b) This subpart does not apply to appeals of orders, or portions

of orders, that

(1) Involve Indian leases or Federal leases for minerals other than

oil and gas; or

(2) Relate to Federal oil and gas leases but do not involve a

monetary or nonmonetary obligation.

Sec. 4.903 What definitions apply to this subpart?

For the purposes of this subpart only:

Assessment means any fee or charge levied or imposed by the

Secretary or a delegated State other than:

(1) The principal amount of any royalty, minimum royalty, rental,

bonus, net profit share or proceed of sale;

(2) Any interest; or

(3) Any civil or criminal penalty.

Delegated State means a State to which MMS has delegated authority

to perform royalty management functions under an agreement or

agreements under 30 CFR part 227.

Designee means the person designated by a lessee under 30 CFR

218.52 to make all or part of the royalty or other payments due on a

lease on the lessee's behalf.

IBLA means the Interior Board of Land Appeals.

Lease means any agreement authorizing exploration for or extraction

of any mineral, regardless of whether the instrument is expressly

denominated as a ``lease,'' including any:

(1) Contract;

(2) Net profit share arrangement; or

(3) Joint venture.

Lessee means any person to whom the United States issues a Federal

oil and gas lease, or any person to whom all or part of the lessee's

interest or operating rights in a Federal oil and gas lease has been

assigned.

Monetary obligation means a lessee's, designee's or payor's duty to

pay, or to compute and pay, any obligation in any order, or the

Secretary's duty to pay, refund, offset, or credit the amount of any

obligation that is the subject of a decision by the MMS or a delegated

State denying a lessee's, designee's, or payor's written request for

the payment, refund, offset, or credit. To determine the amount of any

monetary obligation, for purposes of the default rule of decision in

Sec. 4.906 and 30 U.S.C. 1724(h):

(1) If an order asserts a monetary obligation arising from one

issue or type of underpayment that covers multiple leases or production

months, the total obligation for all leases or production months

involved constitutes a single monetary obligation;

(2) If an order asserts monetary obligations arising from different

issues or types of underpayments for one or more leases, the

obligations arising from each separate issue, subject to paragraph (1)

of this definition, constitute separate monetary obligations; and

(3) If an order asserts a monetary obligation with a stated amount

of additional royalties due, plus an order to perform a restructured

accounting arising from the same issue or cause as the specifically

stated underpayment, the stated amount of royalties due plus the

estimated amount due under the restructured accounting, subject to

paragraphs (1) and (2) of this definition, together constitutes a

single monetary obligation.

Nonmonetary obligation means any duty of a lessee or its designee

to deliver oil or gas in kind, or any duty of the Secretary to take oil

or gas royalty in kind.

Notice of Order means the notice that MMS or a delegated State

issues to a lessee that informs the lessee that MMS or the delegated

State has issued an order to the lessee's designee.

Obligation means:

(1) A lessee's, designee's or payor's duty to:

(i) Deliver oil or gas royalty in kind; or

(ii) Make a lease-related payment, including royalty, minimum

royalty, rental, bonus, net profit share, proceeds of sale, interest,

penalty, civil penalty, or assessment; and

(2) The Secretary's duty to:

(i) Take oil or gas royalty in kind; or

(ii) Make a lease-related payment, refund, offset, or credit,

including royalty, minimum royalty, rental, bonus, net profit share,

proceeds of sale, or interest.

Order means any document or portion of a document issued by the MMS

Director, MMS RMP, or a delegated State, that contains mandatory or

ordering language regarding any monetary or nonmonetary obligation

under any Federal oil and gas lease or leases.

(1) Order includes but is not limited to the following:

(i) An order to pay;

(ii) A MMS or delegated State decision to deny a lessee's,

designee's, or payor's written request that asserts an obligation due

the lessee, designee or payor.

(2) Order does not include:

(i) A non-binding request, information, or guidance, such as:

(A) Advice or guidance on how to report or pay, including valuation

determination, unless it contains mandatory or ordering language; and

(B) A policy determination;

(ii) A subpoena;

(iii) An order to pay that MMS issues to a refiner or other person

involved in disposition of royalty taken in kind; or

(iv) a Notice of Noncompliance or a Notice of Civil Penalty issued

under 30 U.S.C. 1719 and 30 CFR part 241, or a decision of an

administrative law judge or of the IBLA following a hearing on the

record on a Notice of Noncompliance or Notice of Civil Penalty.

Party means MMS, any person who files a Notice of Appeal under 30

CFR part 290 in effect prior to May 13, 1999 and contained in the 30

CFR, parts 200 to 699, edition revised as of July 1, 1998, 30 CFR part

290 subpart B, or 43 CFR part 4, subpart E, and any person who files a

Notice of Joinder in an appeal under 30 CFR part 290, subpart B.

Payor means any person responsible for reporting and paying

royalties for Federal oil and gas leases for production before

September 1, 1996.

[[Page 26261]]

Sec. 4.904 When does my appeal commence and end?

For purposes of the period in which the Department must issue a

final decision in your appeal under Sec. 4.906:

(a) If you filed your Notice of Appeal and initial Statement of

Reasons with MMS before August 13, 1996, your appeal commenced on

August 13, 1996;

(b) If you filed your Notice of Appeal or initial Statement of

Reasons with MMS after August 13, 1996, under 30 CFR part 290, in

effect prior to May 13, 1999 and contained in the 30 CFR, parts 200 to

699, edition, revised as of July 1, 1998, your appeal commenced on the

date MMS received your Notice of Appeal, or if later, the date MMS

received your initial Statement of Reasons;

(c) If you filed your Notice of Appeal under 30 CFR part 290,

subpart B, your appeal commenced on the date MMS received your Notice

of Appeal.

(d) Your appeal ends on the same day of the month of the 33rd

calendar month after your appeal commenced under paragraph (a), (b), or

(c) of this section, plus the number of days of any applicable time

extensions under Sec. 4.909 or 30 CFR 290.109. If the 33rd calendar

month after your appeal commenced does not have the same day of the

month as the day of the month your appeal commenced, then the initial

33-month period ends on the last day of the 33rd calendar month.

Sec. 4.905 What if a due date falls on a day the Department or

relevant office is not open for business?

If a due date under this subpart falls on a day the relevant office

is not open for business (such as a weekend, Federal holiday, or

shutdown), the due date is the next day the relevant office is open for

business.

Sec. 4.906 What if the Department does not issue a decision by the

date my appeal ends?

(a) If the IBLA or an Assistant Secretary (or the Secretary or the

Director of OHA) does not issue a final decision by the date an appeal

ends under Sec. 4.904(d), then under 30 U.S.C. 1724(h)(2), the

Secretary will be deemed to have decided the appeal:

(1) In favor of the appellant for any nonmonetary obligation at

issue in the appeal, or any monetary obligation at issue in the appeal

with a principal amount of less than $10,000;

(2) In favor of the Secretary for any monetary obligation at issue

in the appeal with a principal amount of $10,000 or more.

(b)(1) If your appeal ends before the MMS Director issues a

decision in your appeal, then the provisions of paragraph (a) of this

section apply to the monetary and nonmonetary obligations in the order

that you contested in your appeal to the Director.

(2) If the MMS Director issues a decision in your appeal before

your appeal ends, and if you appealed the Director's decision to IBLA

under 43 CFR part 4, subpart E, then the provisions of paragraph (a) of

this section apply to the monetary and nonmonetary obligations in the

Director's decision that you contested in your appeal to IBLA.

(3) If the MMS Director issues a decision in your appeal, and if

you did not appeal the Director's decision to IBLA within the time

required under 30 CFR part 290 in effect prior to May 13, 1999 and

contained in the 30 CFR, parts 200 to 699, edition revised as of July

1, 1998 (for appeals filed before May 13, 1999 or 30 CFR part 290

subpart B (for appeals filed on or after May 13, 1999 and 43 CFR part

4, subpart E, then the MMS Director's decision is the final decision of

the Department and 30 U.S.C. 1724(h)(2) has no application.

(c) If the IBLA issues a decision before the date your appeal ends,

that decision is the final decision of the Department and 30 U.S.C.

1724(h)(2) has no application. A petition for reconsideration does not

extend or renew the 33-month period.

(d) If any part of the principal amount of any monetary obligation

is not specifically stated in an order or MMS Director's decision and

must be computed to comply with the order or MMS Director's decision,

then the principal amount referred to in paragraph (a) of this section

means the principal amount MMS estimates you would be required to pay

as a result of the computation required under the order, plus any

amount due stated in the order.

Sec. 4.907 What if an IBLA decision requires MMS or a delegated State

to recalculate royalties or other payments?

(a) An IBLA decision modifying an order or an MMS Director's

decision and requiring MMS or a delegated State to recalculate

royalties or other payments is a final decision in the administrative

proceeding for purposes of 30 U.S.C. 1724(h).

(b) MMS or the delegated State must provide to IBLA and all parties

any recalculation IBLA requires under paragraph (a) of this section

within 60 days of receiving IBLA's decision.

(c) There is no further appeal within the Department from MMS's or

the State's recalculation under paragraph (b) of this section.

(d) The IBLA decision issued under paragraph (a) of this section

together with recalculation under paragraph (b) of this section are the

final action of the Department that is judicially reviewable under 5

U.S.C. 704.

Sec. 4.908 What is the administrative record for my appeal if it is

deemed decided?

If your appeal is deemed decided under Sec. 4.906, the record for

your appeal consists of:

(a) The record established in an appeal before the MMS Director;

(b) Any additional correspondence or submissions to the MMS

Director;

(c) The MMS Director's decision in an appeal;

(d) Any pleadings or submissions to the IBLA; and

(e) Any IBLA orders and decisions.

Sec. 4.909 How do I request an extension of time?

(a) If you are a party to an appeal subject to this subpart before

the IBLA, and you need additional time after an appeal commences for

any purpose, you may obtain an extension of time under this section.

(b) You must submit a written request for an extension of time

before the required filing date.

(1) You must submit your request to the IBLA at Interior Board of

Land Appeals, 4015 Wilson Boulevard, Arlington, Virginia 22203, using

the U.S. Postal Service, a private delivery or courier service, hand

delivery or telefax to (703) 235-8349;

(2) If you file a document by telefax, you must send an additional

copy of your document to the IBLA using the U.S. Postal Service, a

private delivery or courier service or hand delivery so that it is

received within 5 business days of your telefax transmission.

(c) If you are an appellant, in addition to meeting the

requirements of paragraph (b) of this section, you must agree in

writing in your request to extend the period in which the Department

must issue a final decision in your appeal under Sec. 4.906 by the

amount of time for which you are requesting an extension.

(d) If you are any other party, the IBLA may require you to submit

a written agreement signed by the appellant to extend the period in

which the Department must issue a final decision in the appeal under

Sec. 4.906 by the amount of time for which you are requesting an

extension.

(e) The IBLA has the discretion to decline any request for an

extension of time.

[[Page 26262]]

(f) You must serve your request on all parties to the appeal.

[FR Doc. 99-11816 Filed 5-12-99; 8:45 am]

BILLING CODE 4310-MR-P