Appeals of MMS Orders

SUMMARY: The Office of Hearings and Appeals and the Minerals Management

Service propose to amend their rules governing the appeal of orders

from both the MMS's Royalty Management Program and MMS's Offshore

Minerals Management Program. Also included in this proposed rulemaking

are new regulations governing the issuance of royalty orders and the

ability of appellants in royalty appeals to demonstrate financial

solvency in lieu of posting a surety in accordance with the Federal Oil

and Gas Royalty Simplification and Fairness Act of 1996, and new

regulations to collect processing fees.

DATES: Comments must be submitted on or before March 15, 1999. MMS will

publish a separate document notice in the Federal Register indicating

date and location of a workshop regarding this proposed rulemaking.

ADDRESSES: Written comments regarding this proposed rule should be sent

to David S. Guzy, Chief, Rules and Publications Staff, at the following

addresses.

For comments sent via the U.S. Postal Service use: Minerals

Management Service, Royalty Management Program, Rules and Publications

Staff, P.O. Box 25165 MS 3021, Denver, CO 80225-0165. Courier or

overnight delivery address is: Building 85, Room A-613, Denver Federal

Center, Denver, CO 80225; or e-mail RMP.[email protected].

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: We will post public comments after the

comment period closes on the Internet at http://www.rmp.mms.gov or

contact David S. Guzy, Chief, Rules and Publications Staff, telephone

(303) 231-3432, FAX (303) 231-3385.

I. General Background

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

appeals process, particularly as it relates to appeals involving orders

or decisions issued by the Royalty Management Program (RMP). As part of

that review, MMS held several informal meetings with State, tribal, and

industry representatives to discuss the problems and possible solutions

within 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.

On August 13, 1996, the President signed the Federal Oil and Gas

Royalty Simplification and Fairness Act, Pub. L. 104-185, as corrected

by Pub. L. 104-200 (RSFA). Section 4 of RSFA amended the Federal Oil

and Gas Royalty Management Act of 1982 (FOGRMA), 30 U.S.C. 1701 et

seq., and added a new FOGRMA Sec. 115(h), 30 U.S.C. 1724(h), governing

the Department's process for resolving 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, the Department has 33 months from the date a

proceeding is commenced to complete all levels of administrative

review. If the Department does not decide the appeal within 33 months,

the appeal is deemed decided either for or against the Department,

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 this MMS review and the new legislation, MMS announced a

proposed rule in the Federal Register on October 28, 1996. The proposed

regulation provided for amendments to 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

responding to the Royalty Policy Committee (RPC) report. 62 FR 68244.

Accordingly we hereby withdraw the October 28, 1996, proposed rule.

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

under the Minerals Management Advisory Board. The RPC's purpose is to

provide advice to the Secretary on the Department's management of

Federal and Indian mineral leases, revenues, and other minerals-related

policies. The RPC includes representatives from States, Indian tribes

and allottee organizations, minerals industry associations, Federal

agencies and the public. At the RPC's first meeting in September 1995,

it established eight Subcommittees, including the Appeals and

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

Subcommittee was created to make recommendations to the RPC to improve

the processes involving appeals and alternative dispute resolution.

Membership in the Subcommittee included eleven representatives from

industry, five representatives from States, and two representatives

from Indian tribes. In addition to the voting members, the Subcommittee

benefitted from the participation of several other persons as non-

voting members and of two employees of MMS as staff to the

Subcommittee. The Subcommittee agreed that the principal purpose of the

MMS administrative appeals process should be the expeditious and

independent review of appeals.

The Subcommittee recognized that the MMS appeals process had been

under criticism and serious review since 1994 and believed that

substantial reform was needed. Some of the problems the Subcommittee

identified in the existing appeals process were:

1. Lack of timely resolution;

2. Lack of clarity in some orders;

3. Perceived lack of independence and unfairness of MMS Director-

level appeals decisions due to the internal clearance process and

communication within the Department between those involved in making

the initial decision and those involved in making the decision on

appeal;

4. Policy uncertainty--some orders issued without MMS having

clearly decided and explained policy issues;

5. Inability of the appellant to determine what the administrative

record for the order contains;

6. Allegedly conflicting roles of the Solicitor's Office in

satisfying institutional needs (assisting in setting policy and overall

litigation strategy) and acting as a legal advocate for MMS; and

7. Duplication of effort between the MMS Director and Interior

Board of Land Appeals (IBLA) levels of review.

Throughout its review of the appeals process, the Subcommittee

insisted that its recommendations needed to meet certain principles.

Any changes in the process:

1. Could not substantially harm the position of MMS;

2. Would need to ensure that the process would be completed within

33 months;

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3. Should encourage the parties to develop the facts, clarify the

issues, and resolve disputes at the earliest possible opportunity;

4. Would have to reduce the costs of the process to the

participants;

5. Would clarify the role of Indian lessors as parties; and

6. Would clarify delegated State participation.

The RPC unanimously adopted and approved the recommendation of the

RPC Appeals and ADR Subcommittee and submitted a report (RPC Report) to

the Secretary of the Interior on March 27, 1997. The RPC Report

recommended a number of specific steps involving both appeals and ADR

processes. The RPC recommended changing the current two-stage appeals

process into a one-stage IBLA administrative appeal process designed to

solve the problems and meet the principles identified above. The

Subcommittee recommended that:

1. MMS resolve all fundamental policy questions before it or a

delegated State issues an order;

2. DOI encourage the resolution of disputes without completing the

formal administrative appeals process;

3. DOI clarify the standing of Indian lessors and ``States

concerned'' with respect to the administrative appeals process;

4. DOI change the structure of the administrative appeals process,

so that appeals of MMS, State, or tribal orders are taken to the IBLA,

under a special set of rules applicable to royalty appeals; and

5. DOI specify the differences in appeals involving Indian leases

and Federal leases for minerals other than oil and gas because the

provisions of RSFA do not apply to those leases.

On September 22, 1997, the Secretary accepted the RPC Report for

implementation with some changes and clarifications. This proposed rule

is based primarily on the RPC Report and the changes and clarifications

identified in the Secretary's letter dated September 22, 1997.

To implement the RPC recommendations, as modified by the

Secretary's letter, MMS formed a regulation writing team comprised of

representatives from MMS, the IBLA, the Office of the Solicitor, and

State audit offices. That team drafted the proposed rule with the goal

of developing an appeals process implementing the RPC's recommendations

in accordance with the Secretary's changes and clarifications.

During the drafting process, the team members heard concerns about

whether the result of the recommendations of the RPC will actually

advance the RPC's primary goal: namely, timely and efficient resolution

of appeals. The pre-briefing procedures in the proposed rule are

complex in order to meet the following goals:

(1) Implement RSFA provisions setting time limits on appeals and

requiring at least one settlement conference for each appeal;

(2) Respond to other RSFA provisions regarding orders and the roles

of lessees when their designees receive orders;

(3) Coordinate RSFA time limits with other provisions of the rule;

and

(4) Respond to recommendations of the RPC involving enhanced

participation of Indian lessors and delegated States in the appeals

process; continued ability of the MMS Director to recommend whether to

concur with, modify or rescind orders; and continued ability of

Assistant Secretaries to decide appeals.

An example of a scenario illustrating the complexity of the

proposed rule would be when the MMS Director modifies an order and the

delegated State disagrees with the modification and intervenes. Assume

in the example that both the appellant and MMS wish to file documents

not contained in the record they certified under Sec. 4.919 or to add

issues not contained in the ``Joint Statement of Facts and Issues''

(this is often the case under the current process and is possible under

the proposed appeals process). As a result of the expedited briefing

process under the proposed rule, in the example, MMS and the delegated

State would each file up to seven substantive documents (i.e. briefs,

replies, responses, requests, surreplies), and the appellant would file

up to six substantive documents, all in less than four months. The IBLA

may have to issue two orders regarding the record prior to its final

decision, and to consider up to twenty substantive pleadings in order

to arrive at its final decision. (The current process usually involves

three or four substantive pleadings and a single decision by the IBLA.)

While this example does not reflect the proposed process in its

simplest form, even more complicated processes are possible. Therefore,

in cases such as this example, the pre-briefing procedures and more

formal IBLA processes described in this proposed rulemaking will add

expense to the appeal process for both appellants and MMS.

In recent years under the existing process the MMS Director has

been deciding an average of approximately 213 appeals per year.

Approximately 75 of these (35%) are appealed to IBLA. Thus, under the

current process, a minority of MMS Director's decisions are appealed to

IBLA.

Also, in recent years, we estimate that it has taken the IBLA, on

average, about 18 months to issue a decision (counting from the date an

MMS royalty appeal is fully briefed and ripe for decision). This number

is based on data from the IBLA's docketing system.

The proposed rule is likely to increase the IBLA's workload, on

average, for individual royalty appeals. Under the proposed rule, the

IBLA would have to issue a decision in every appeal that is not

resolved or settled by MMS and the appellant or decided by an Assistant

Secretary. Even assuming that the IBLA's docket load does not increase

under the proposed rule, the IBLA will have to issue a decision in a

royalty appeal every 6 days in order to meet the 33-month deadline.

This figure is based on 75 royalty appeals per year to the IBLA and 430

days to decide those appeals (20 months less weekends and holidays). It

does not include the 130 royalty appeals currently pending before the

IBLA, of which 81 are subject to RSFA's 33-month deadline.

Any additional workload also could affect IBLA's ability to timely

decide appeals affecting Bureau of Land Management (BLM) and Office of

Surface Mining programs, as well as appeals of royalty issues which are

not subject to RSFA's 33-month deadline. The Department's Office of the

Inspector General (OIG) is currently conducting an audit that is

expected to address the timeliness of IBLA's disposition of MMS royalty

appeals. OIG is expected to issue a draft audit report before this rule

becomes final, and its report may provide information that would be

useful in evaluating the implications of this proposed rule as well as

any possible alternative proposals.

We recognize that there are deficiencies in the current process. We

encourage comments on whether and how the procedures recommended in the

RPC Report might serve to, or be modified to, make the appeal process

more efficient and effective. We invite comment on whether alternatives

to the proposed rule might reach the goal of the Royalty Policy

Committee by a simpler route than the processes set forth in the

proposed rulemaking.

We specifically request comment on whether, as an alternative to

the procedures described in this proposed rulemaking, the current two-

level administrative appeal process should be retained, with

amendments. These amendments would:

(a) Implement the RSFA requirements for settlement conferences and

default

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decisions if appeals are not resolved within 33 months of their

commencement (similar to those contained in this rulemaking under

Secs. 4.906, 4.907, 4.911-4.913, 4.924-4.926, 4.950, 4.951, 4.954,

4.956, 4.957, and 4.970-4.972);

(b) Establish procedures for lessees to appeal notices sent to

designees; and

(c) Incorporate internal time constraints for appeals pending

before the MMS Director to ensure that the Department decides appeals

within the RSFA 33-month deadline, such as those previously proposed,

see 61 FR 33607 (1996).

However, retaining the current process, with amendments, might not

address other goals of the RPC.

Several portions of this proposed rule would implement the RPC

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

establish a new procedure for appeals of royalty orders. The current

regulations at 30 CFR part 290 and 43 CFR part 4, subpart E would no

longer apply to appeals of royalty orders. Under the new proposed

process, MMS's role would be limited to record development and

settlement discussions at an early stage of the process and to deciding

whether to modify or rescind orders prior to argument at the IBLA or to

an Assistant Secretary. The IBLA (or an Assistant Secretary) would

decide cases under a new, modified IBLA appeals process, and RSFA time

limits would be imposed on appeals that are subject to that Act.

Second, the new proposed 30 CFR part 242 would establish procedures

for orders that MMS and delegated States issue. The new part 242 would

respond to the RPC recommendations on how MMS and delegated States

should communicate their preliminary audit findings and issue orders.

See RPC Recommendations at paragraphs 5-7. The general principle behind

this part is that MMS and delegated States should clearly communicate

specific information about the basis for orders. This part also would

establish procedures for Indian lessors to request formally that MMS

take actions with respect to their leases. That would help to implement

the RPC recommendation that the new regulations clarify the standing

and role of Indian lessors in the appeals process. See RPC Report at

page 10. In addition, this part would incorporate certain RSFA

provisions regarding orders and orders to perform restructured

accounting and regarding notifying lessees when orders are sent to the

persons designated by the lessees to pay their royalties. Finally, this

part would incorporate appeals and service requirements that currently

are found at 30 CFR part 243.

Third, the proposed revision of 30 CFR part 243 would implement

changes that RSFA made to requirements for staying orders pending

appeal. RSFA Sec. 4(a) amended FOGRMA to add a new Sec. 115(l), 30

U.S.C. 1724(l), ``Stay of Payment Obligation Pending Review.'' Section

115(l) allows any person (as that term is defined by FOGRMA Sec. 102

(12)), who MMS or a delegated State orders to pay any obligation (other

than an ``assessment'') subject to RSFA, to demonstrate that the person

is ``financially solvent.'' Under the proposed rule, if MMS determines

that the person is financially solvent, the person is entitled to a

stay of an order (other than one to pay an assessment) without posting

a bond or other surety instrument pending an administrative or judicial

proceeding. If the person is unable to demonstrate financial solvency,

the Secretary will require a bond or other surety instrument

satisfactory to cover the obligation. The proposed regulations would

explain the process and standards for demonstrating financial solvency.

As part of those proposed regulations, MMS also is rewriting 30 CFR

part 243 in ``plain language'' and revising it to eliminate references

to 30 CFR part 290.

Because MMS is eliminating appeals to the MMS Director under 30 CFR

part 290 for RMP orders, MMS rewrote that part to only refer to appeals

of the MMS Offshore Minerals Management Program (OMM). MMS determined

that it would be advantageous to amend its process for appeals from

decisions by officials of OMM at the same time it proposes the

revisions to the RMP appeals process. The proposed OMM appeals process

is patterned after the process the BLM uses for appeals of BLM

officials' decisions because they have similar responsibilities with

respect to onshore Federal and Indian trust lands. We request comments

on whether we should adopt this process for offshore appeals or whether

we should retain the current process.

The Departmental team that drafted the proposed appeals rule

received public input initially from the Royalty Policy Committee, as

described above, and also conducted two public workshops and five

outreach sessions with Indian tribes and individual Indian mineral

owners. The two public workshops were held in Denver, Colorado on

January 27, 1998, and March 30, 1998. These workshops were announced in

the Federal Register (62 FR 68244, December 31, 1997, and 63 FR 11634,

March 10, 1998) and were attended primarily by representatives of

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

large integrated producers and of smaller independent producers. The

team distributed to workshop participants copies of preliminary drafts

of the proposed rule prior to the sessions, thereby providing

participants an opportunity to prepare specific questions, suggestions,

and comments.

The five outreach sessions with Indian lessors were as follows:

April 29, 1998, Canadian, Oklahoma, Muskogee Area Office.

This outreach meeting was attended by representatives of the Cherokee

Nation, Choctaw Nation, and Creek Nation, as well as many individual

Indian mineral owners and heirs. BIA Area Office and Agency staff also

attended;

May 19, 1998, Bismarck, North Dakota, Aberdeen and

Billings Area Offices. BIA Agency representatives from Cheyenne River,

Fort Berthold and Standing Rock attended this meeting. In addition,

tribal members from the Three Affiliated Tribes (Mandan, Arikara, and

Hidatsa) from Fort Berthold attended;

May 20, 1998, El Reno, Oklahoma, Concho Agency. This

outreach meeting was attended by individual Indian mineral owners from

the Concho and Anadarko areas. BIA Area Office and Agency staff also

attended;

June 12, 1998, Scottsdale, Arizona, tribal members of the

State and Tribal Audit Committee. This outreach meeting was attended by

representatives of the Blackfeet Nation, Navajo Nation, Shoshone and

Arapaho Tribe, Southern Ute Indian Tribe, and Ute Mountain Ute Tribe;

and

July 7, 1998, Denver, Colorado, Indian Energy and Minerals

Conference. Attendees included representatives from various BIA Area

Offices and Agencies, as well as representatives of the following

Tribes: Alabama and Coushatta Tribes, Assiniboine and Sioux Tribes,

Burns Paiute Reservation Tribe, Choctaw Nation of Oklahoma, Eastern

Shoshone Tribe, Jicarilla Apache Tribe, Navajo Nation, Osage Tribe,

Shoshone Nation, Southern Ute Tribe, Three Affiliated Tribes, and Ute

Mountain Ute Tribe.

At these sessions, the team members described the rule and its

anticipated effects on Indian lessors and received comments from

individual Indian mineral owners, tribal representatives, and MMS and

BIA representatives about how best to structure the rule to protect

Indian trust resources.

As discussed below in the applicable Section-by-Section analysis,

this rulemaking also would propose to

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charge reasonable processing fees where appropriate.

II. Section-by-Section Analysis, 43 CFR Part 4, Subpart J

Section 4.901 What is the Purpose of This Subpart?

This section would state that the purpose of this subpart is to

explain the procedures for appeals of MMS or delegated State orders,

and MMS decisions not to issue orders under 30 CFR part 242, concerning

reporting to the MMS RMP and the payment of royalties and other

payments due under leases subject to this subpart. This subpart would

replace 30 CFR part 290 with respect to appeals of RMP and delegated

State actions regarding royalties and other payments. The regulation at

30 CFR part 290 would only apply to appeals of MMS OMM actions

regarding offshore lease operational obligations, not to actions

regarding royalties and other payments.

Section 4.902 What Leases are Subject to This Subpart?

This section would explain that this subpart 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 regardless of the statutory

authority under which the lease was issued or maintained. See Section-

by-Section analysis for Sec. 4.903 for an explanation of the definition

of ``lease.'' However, some procedures under this rule would apply only

to Federal oil and gas leases because the RSFA requirement for deciding

appeals within 33 months, 30 U.S.C. 1724(h), applies only to such

leases. Accordingly, those procedures would specifically state that

they do not apply to Federal solid mineral and geothermal leases, or

Indian leases.

Section 4.903 What Definitions Apply to This Subpart?

This section would explain the definitions that you will need to

know for this subpart. However, other definitions in this part, or 30

CFR Chapter II, which are not specifically defined in this proposed

rule, and do not conflict with definitions in this proposed rule, also

would apply.

Affected would mean, with respect to delegated States and States

concerned, that the appeal concerns an order regarding a Federal

onshore or Outer Continental Shelf lease, within a State's borders or

offshore of the State, from which the State, or a political subdivision

of the State, receives a statutorily-prescribed portion of the

royalties; and, with respect to Indian lessors, that the appeal

concerns an order regarding the Indian lessor's federally-administered

mineral lease. This definition is intended to distinguish between

States concerned, delegated States, and Indian lessors that are

directly affected by the action (or inaction) under appeal, and those

that are either only indirectly affected or that are merely interested

in the appeal's outcome.

Assessment would mean 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 would mean a State to which MMS has delegated

authority to perform royalty management functions pursuant to an

agreement or agreements under regulations at 30 CFR part 227. This

definition is essentially the same as that under RSFA Sec. 2(1), adding

FOGRMA Sec. 3, 30 U.S.C. 1702(22).

Designee would mean 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. This definition is essentially the same

as that under RSFA Sec. 2(1), adding FOGRMA Sec. 3(24), 30 U.S.C.

1702(24). Accordingly, the definition would cite the rule implementing

the requirements of RSFA Sec. 6(g), amending FOGRMA Sec. 102(a), 30

U.S.C. 1712(a), which allows lessees to designate another person to pay

royalties on their behalf by written notice filed with MMS. Thus, this

definition would apply only to appeals involving royalties and other

payments due on production from Federal oil and gas leases after

September 1, 1996, because RSFA applies only to such payments.

IBLA would mean the Interior Board of Land Appeals.

Indian lessor would mean 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 would mean any contract, net profit share arrangement, joint

venture, or other agreement authorizing exploration for or extraction

of any mineral, regardless of whether the instrument is expressly

denominated as a ``lease.'' This would include all agreements the

Secretary approves under the Indian Mineral Development Act, 25 U.S.C.

2101 et seq.

Lessee would mean 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. This definition is

essentially the same as that under RSFA Sec. 2(1), amending FOGRMA

Sec. 3(7), 30 U.S.C. 1702(7), and would include owners of operating

rights. RSFA defines ``lessees'' to include holders of operating

rights. However, RSFA does not apply to Federal oil and gas leases for

production prior to September 1, 1996, other Federal solid mineral and

geothermal leases, and Indian leases. Therefore, we did not separately

define operating rights owners or operators because recipients of

orders not subject to RSFA may appeal under this rule regardless of

whether they are a ``lessee'' under RSFA.

Monetary obligation would mean any requirement to pay or to compute

and pay any obligation in any order. We included this definition

because Congress did not define ``monetary obligation'' in RSFA for

purposes of the default decision rule in 30 U.S.C. 1724(h), which

Secs. 4.956 and 4.972 would implement. Under this definition,

``monetary obligation'' would include amounts that MMS or delegated

States assert that lessees, designees, and payors owe, as well as

amounts that lessees, designees, and payors assert are owed to them

(for example refunds of alleged overpayments). The definition of

``monetary obligation'' would include amounts due as a result of orders

to compute and pay because there is no indication that Congress

intended to restrict its meaning to only an ``order to pay'' a

specifically stated amount. Moreover, orders to compute and pay usually

contain an ``order to pay'' additional royalty amounts due based on the

test leases and months.

This definition also would clarify what constitutes a single

monetary obligation as opposed to separate monetary obligations when an

order covers multiple issues. Paragraph (1) would state that 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. For example, assume MMS

issued an order to you determining that you underpaid royalties on

Lease Nos. A, B, and C, for production months January 1, 1996, through

December 31, 1996, because you failed to pay royalties on

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tax reimbursements that are part of your gross proceeds. The amount

owed under that order would constitute one monetary obligation, not

three (one for each lease), or twelve (one for each production month),

or thirty-six (one for each production month for each lease).

Paragraph (2) would state that 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), constitute separate monetary obligations. For

example, assume the same facts as described under paragraph (1).

However, also assume that the order determines that you underpaid

royalties on the same leases for the same production months because you

improperly calculated a gas processing allowance. In that situation,

the gross proceeds issue described in paragraph (1) would constitute

one monetary obligation, and the processing allowance issue would

constitute another monetary obligation.

Subparagraph (3) would state that 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), together constitute a

single monetary obligation. For example, assume the same facts as

described under paragraph (1). Also assume that the order requires you

to perform a restructured accounting on all of your leases to determine

whether you underpaid royalties on those leases because you failed to

pay royalties on tax reimbursements. That order would constitute one

monetary obligation. However, assuming the same facts as described

under paragraphs (1) and (2), if the order also required you to perform

a restructured accounting on all of your leases to determine whether

you calculated the proper processing allowance, then the gross proceeds

issue described in paragraph (1), together with the requirements to

perform a restructured accounting on tax reimbursements, would

constitute one monetary obligation, and the processing allowance issue,

together with the order to perform a restructured accounting on the

processing allowance issue, would constitute another monetary

obligation.

Nonmonetary obligation would mean only any duty of a lessee or its

designee to deliver oil and gas in kind, or any duty of the Secretary

to take oil and gas royalty in kind. This definition is consistent with

the definition of ``obligation'' under RSFA Sec. 2(1), adding FOGRMA

Sec. 3(25), 30 U.S.C. 1702(25), because these obligations are the only

two under the statutory definition that are ``nonmonetary.'' Thus, for

example, orders to report or produce information and denials of

requests for exceptions from various reporting requirements would not

be ``nonmonetary obligations'' because they are not defined as

``obligations'' under RSFA.

Notice of order would mean the notice under 30 CFR part 242 that

MMS or a delegated State would provide to a lessee stating that MMS or

the delegated State has issued an order to the lessee's designee. As

stated above, RSFA allows lessees to designate another person to pay

royalties on their behalf by written notice filed to MMS. 30 U.S.C.

1712(a). However, only lessees, not their ``designees,'' are liable for

any payment obligations. Id. Thus, if MMS issues a written order to pay

to a designee, RSFA's definition of ``order to pay'' requires MMS to

serve a notice of that order on that designee's lessee. 30 U.S.C.

1702(26), as added by RSFA Sec. 2(1).

Obligation would mean:

(1) A lessee's, designee's or payor's duty to:

(i) Deliver 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. This definition is essentially the same

as that under RSFA Sec. 2(1), adding FOGRMA Sec. 3(25), 30 U.S.C.

1702(25).

Order would mean any document issued by the MMS Director, officials

of the MMS RMP, or a delegated State that contains mandatory or

ordering language that requires the recipient of an order 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. The proposed rule would refer to 30 CFR part 242, which is

being proposed in this same Federal Register Notice, to refer

appellants to the standards for issuing orders contained in that part.

The purpose of this definition is to establish the types of orders

that are appealable under this subpart. This section would define what

actions are appealable orders and what actions are not appealable

orders. Only certain written orders, instructions or other actions by

the MMS Director, RMP officials, or a delegated State concerning the

reporting and payment of royalties and other payments due under leases

subject to this proposed subpart would be appealable ``orders'' under

this proposed rule.

Orders would have to include mandatory or ordering language. For

example, if you received a written instruction or other action by the

MMS Director, RMP, or a delegated State that contained language such as

``you must pay,'' ``you must recalculate and pay,'' ``you are ordered

to pay,'' ``you are ordered to recalculate and pay,'' ``you may not

take this credit,'' or ``you may not use this exception,'' that would

be considered mandatory or ordering language and the order would be

appealable under this proposed rule.

Under paragraph (1), orders would include but not be limited to:

(i) An order to pay. Order to pay would be defined under 30 CFR

part 242, proposed in this same rulemaking, and that definition would

essentially be the same as that under RSFA Sec. 2(1), adding FOGRMA

Sec. 3(26), 30 U.S.C. 1702(26);

(ii) An MMS or delegated State decision to deny a lessee's,

designee's, or payor's written request that MMS make a payment, refund,

offset, or credit of money to the lessee or designee related to the

principal amount of any royalty, minimum royalty, rental, bonus, net

profit share, proceeds of sale, or any interest or assessment related

to a lease obligation. These are MMS's ``obligations'' as defined under

RSFA, Sec. 2(1), adding FOGRMA Sec. 3(25)(A), 30 U.S.C. 1702(25)(A).

Thus, for example, if a lessee or designee believes MMS has improperly

denied a refund of a claimed overpayment, the lessee or designee may

appeal that denial. However, although a lessee would have standing to

file an administrative appeal concerning an MMS decision not to take

royalty-in-kind, we do not believe that the lessee would have any

substantive basis for the appeal because the decision whether to take

royalty-in-kind is committed to the Secretary's discretion by law. 30

U.S.C. 192;

(iii) A denial of a request for an exception from any valuation and

reporting requirement;

(iv) An order to perform restructured accounting. Orders to perform

restructured accounting would be defined under 30 CFR part 242,

proposed in this same rulemaking, and that definition would be

consistent with the description in RSFA Sec. 4(a), adding FOGRMA

Sec. 115(d)(4)(B)(i), 30 U.S.C.

[[Page 1935]]

1724(d)(4)(B)(i). However, an order to perform a restructured

accounting that requires the recipient to provide schedules of

recalculations would not be considered an order to provide documents or

information under this proposed rulemaking. See RSFA, Sec. 4(a), adding

FOGRMA Sec. 115(d)(4)(C), 30 U.S.C. 1724(d)(4)(C), which provides that

``[a]n order to perform a restructured accounting shall not mean or be

construed to include any other action by or on behalf of the Secretary

or a delegated State;''

(v) An order to file a report related to any royalty or other lease

obligation under 30 CFR part 210 or 216; and

(vi) An order to provide documents or information. This section

also would make clear that orders to perform a restructured accounting

are not ``orders to provide documents or information.'' As discussed

below, under proposed Sec. 4.905, an order to provide documents or

information is not appealable under this subpart if it is issued by the

Associate Director for Royalty Management or by someone to whom that

Associate Director has delegated the authority to issue orders to

provide documents or information that are final for the Department.

This section also would state what MMS or delegated State actions

would not constitute ``orders.'' As a threshold matter, actions that

the MMS OMM takes regarding offshore lease operational obligations

would not be appealable ``orders'' under this proposed rule. For

example, OMM actions that allocate production or otherwise affect

production volume would not be appealable ``orders'' under this subpart

even if they could affect royalty calculations. Those orders would be

appealable under 30 CFR part 290.

Under paragraph (2)(i), orders would not include non-binding

requests, information, and guidance such as:

(A) A Preliminary Determination Letter issued under proposed 30 CFR

242.102. These are commonly called ``issue letters'' and do not contain

mandatory or ordering language. Rather, they inform the recipient that

MMS has made a preliminary determination, and invite responses to that

determination prior to issuance of an appealable ``order'';

(B) Advice or guidance on how to report or pay, including a

valuation determination, unless it contains mandatory or ordering

language. For example, assume that you have asked MMS whether it

believes that you are properly valuing your production under a

particular regulation. Also assume that MMS responds that under its

interpretation of the regulations, it does not believe that you are

properly valuing your production. That guidance would not be

appealable. However, if you ignored MMS's guidance, and continued

valuing your production using your valuation method, MMS could later

issue an order stating that you must pay additional royalty because MMS

has determined that you improperly valued that production. In such

instances, you could appeal that order; and

(C) A policy determination. For example, a general letter to

royalty payors advising them of RMP's interpretation regarding a

particular issue--such as the RMP May 3, 1993, ``Dear Payor Letter'' on

the royalty consequences of gas contract settlements--would not be

appealable.

The Department does not consider such documents ``orders'' because

they do not require anyone to take any specific action. However, if a

valuation determination or a letter to payors includes mandatory

language requiring a person to take a specific action with respect to a

mineral lease administered by the Secretary, then it is an order. In

addition, a person's failure to follow guidance or policy

determinations would not preclude that person from later appealing an

``order'' with mandatory language requiring the person to follow such

guidance.

Paragraph (ii) would state that subpoenas also would not be

considered ``orders.'' 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. Therefore, they are not

appealable ``orders.''

Under paragraph (2)(iii), orders to pay that MMS issues to refiners

or other persons involved in disposition of royalty taken in kind would

not be classified as ``orders'' under this subpart, because those

orders arise out of contracts for sale of royalty-in-kind (RIK)

production and not out of obligations under leases subject to this

subpart. See related changes to 30 CFR part 208 in this same notice.

Party would mean MMS, any person who files a Notice of Appeal, and

any person who files a Notice of Joinder or Intervention Brief in an

appeal under this subpart. This definition is necessary because

``parties'' have certain rights and obligations under this proposed

rulemaking that other participants in the appeals process do not.

Payor would mean any person responsible for reporting and paying

royalties for:

(1) Federal oil and gas leases for production before September 1,

1996;

(2) Federal mineral leases other than oil and gas leases; and

(3) Leases on Indian lands subject to this Subpart. This definition

is necessary because the term ``designee'' is used for Federal oil and

gas leases subject to RSFA, and ``payor'' is used for leases not

subject to RSFA. In addition, designees have certain requirements under

this proposed rulemaking, such as serving their Notice of Appeal on

their lessee(s) under Sec. 4.907(d).

Reporter would mean a person who submits reports for leases subject

to this subpart regardless of whether that person has payment

responsibility.

State concerned would mean the State that receives a statutorily-

prescribed portion of the royalties from a Federal onshore or Outer

Continental Shelf lease. This definition is modeled after the

corresponding definition under RSFA, Sec. 2(1), adding FOGRMA

Sec. 3(31), 30 U.S.C. 1702(31).

Section 4.904 Who May File an Appeal?

Under paragraph (a), if you receive an order, as defined under this

subpart, you could appeal that order if the order adversely affects

you, except as provided under Sec. 4.905.

Under paragraph (b), if you are a lessee and you receive a Notice

of Order, you would have three options under this proposed rule

regarding appealing the order issued to your designee. First, you could

appeal the order yourself. If you chose to appeal the order yourself,

you could make your own arguments in the appeal as an appellant,

regardless of whether your designee also appeals the order or makes

those arguments.

Second, you could join in your designee's appeal under Sec. 4.908.

We added the joinder provision to protect lessees should the designee

decide during some part of the appeals process that it no longer wishes

to pursue the appeal. If you chose to join your designee's appeal under

Sec. 4.908, you would be deemed to appeal the order jointly with the

designee, but the designee would have to fulfill all requirements

imposed on appellants under this subpart. Thus, you could not file any

submissions or pleadings separately from the designee. The purpose of

limiting pleadings to designees is to prevent numerous duplicative

submissions by multiple lessees of a single designee.

Third, you could neither appeal nor join, but instead rely on your

designee's appeal. However, if you chose this option, your designee's

actions with

[[Page 1936]]

respect to the appeal, and any decisions in the appeal, would bind you.

In other words, if your designee lost the appeal, you could not

reappeal the same order. Likewise, if your designee discontinued its

appeal, you could not reappeal the same order or continue the appeal

for the designee.

Under paragraph (c), if you are an Indian lessor, you could file an

appeal of any MMS decision not to issue an order under 30 CFR part 242

that adversely affects you. Part 242, also proposed in this Federal

Register Notice, would explain the process for Indian lessors to

request that MMS issue an order. This paragraph would implement the RPC

Report's recommendation that we clarify the appeal rights of Indian

lessors. RPC Report, page 10. Note, however, that States could not

appeal orders or decisions not to issue orders. Delegated States could

intervene under Sec. 4.934 in an appeal of an order. We decided not to

allow States to appeal orders or decisions not to issue orders because,

unlike Indian lessors, States do not have a property interest in

leases. In addition, States can request authority to issue orders

pursuant to an agreement or agreements under MMS's regulations at 30

CFR part 227.

Section 4.905 What May I Not Appeal Under This Subpart?

This section would state that you could not appeal:

(a) An action that is not an order, as defined in this subpart;

(b) An order to provide documents or information issued under 30

CFR 242.104(b)(4) by the Associate Director for Royalty Management, or

any person to whom that Associate Director has delegated the authority

to issue such orders that are final for the Department. We propose to

make these orders final for the Department because: (1) courts have

consistently upheld MMS's authority to issue orders to produce

documents and information, see Shell Oil Co. (On Reconsideration, 132

IBLA 354 (overruling Shell Oil Co., 130 IBLA 93), aff'd, Shell Oil Co.

v. Babbitt, 945 F. Supp 792 (D. Del. 1996), aff'd, 125 F.3d 172 (3d

Cir. 1997); Santa Fe Energy Products Co., 127 IBLA 265 (1993), aff'd

Santa Fe Energy Products Co. v. McCutcheon, No. 94-C-535, slip op., (D.

Colo. Mar. 30, 1995), aff'd, 90 F.3d 409 (10th Cir. 1996); and (2) it

would avoid the delay caused by administrative appeals of such orders.

Delays associated with these types of orders are particularly

detrimental because they interfere with MMS's and delegated States'

ability to determine whether additional royalties or other payments may

be due. Accordingly, we propose to make such orders subject to judicial

review directly. However, if the order is issued by a person other than

the Associate Director for Royalty Management, or a person delegated

the authority to issue such final orders, then it would be appealable

under this subpart.

(c) A determination of the surety amount or financial solvency

under 30 CFR part 243, subparts B or C. These determinations are final

for the Department and are not subject to administrative appeal.

Section 4.906 When Must I File an Appeal?

You would have to file your appeal with MMS as required under

Sec. 4.960 within 60 days after MMS or a delegated State serves the

order or Notice of Order, or MMS serves a decision not to issue an

order under 30 CFR part 242. An order, Notice of Order, or decision not

to issue an order would be considered served as provided under 30 CFR

242.305.

Formerly, appeals of MMS RMP orders had to be filed within 30 days

of the person's receipt of the order. This rule extends the time in

which to appeal to 60 days from receipt, as the RPC Report recommended.

The 60 day time frame also implements the requirement under RSFA,

Sec. 4(a), adding FOGRMA Sec. 115(d)(4)(B)(ii)(V), 30 U.S.C.

1724(d)(4)(B)(ii)(V), that orders to perform a restructured accounting

``provide the lessee or its designee 60 days within which to file an

administrative appeal of the order. * * *.''

Unlike other appeals to IBLA, which are filed with the office that

issued the decision being appealed (see 43 CFR 4.411), these appeals

would be filed with a centralized office in MMS called the MMS Dispute

Resolution Division (DRD). We chose this centralized approach to ensure

accurate documentation of receipt, to facilitate collection of

processing fees, and to minimize delays in initiating record

development and settlement efforts. In effect, the DRD would receive

the appeals on behalf of the MMS or delegated State office that issued

the order being appealed.

We would eliminate the grace period for filing formerly included

under 30 CFR 290.5(b) (mailed within the 30 day appeal period and

received within 10 days of the 30th day). Instead, we would extend the

time period within which to file to 60 days, with no exceptions or

grace periods. However, to make filing easier, we would allow filing by

telefax, and we plan to centralize the docketing function to ensure

that employees are present during business hours to receive appeals. We

specifically request comments on what methods of filing we should

accept and ways we could provide appellants with documentation of the

receipt date other than a return receipt card.

Section 4.907 How Must I File an Appeal?

Under paragraph (a) of this proposed section, for an appeal to be

considered filed, the MMS DRD would have to receive the appellant's

Notice of Appeal, Preliminary Statement of Issues, and Processing Fee

within the time required under Sec. 4.906.

The written Notice of Appeal would have to include a copy of the

order, or MMS decision not to issue an order, that the appellant is

appealing. Appellants would not be allowed to extend the 60-day period

for MMS to receive their Notice of Appeal.

The written Preliminary Statement of Issues would have to state the

issues the appellant will raise on appeal. The RPC Report recommended

requiring a Preliminary Statement of Issues. The Secretary, in his

September 22, 1997, letter to the RPC, modified that RPC Report

recommendation to state that appellants must ``specifically identify

their legal and factual disagreements with the MMS action.'' However,

he stated that it need not be a legal brief or include the level of

detail appellants currently provide in a Statement of Reasons to the

MMS Director. The Secretary stated that the purpose of the Preliminary

Statement of Issues is to ``ensure productive, well-informed record

development and settlement efforts.'' Moreover, MMS or the delegated

State will have stated the facts and law or regulations relied upon in

issuing the order. Thus, it is imperative that the appellant

specifically identify the factual and legal disagreements the appellant

has with an order so that MMS can properly evaluate the appellant's

position. For example, a blanket statement that the appellant disagrees

with the order, without stating the legal or factual basis for the

disagreement, would not be sufficient information for MMS to determine

whether the appellant's position has merit, or to respond to the

appellant. Nor would a list of issues, without some explanation of how

the facts of the appeal raise those issues, be sufficient. Therefore,

the proposed rule would require appellants to specifically identify the

legal and factual disagreements they have with the order, or MMS

decision not to issue an order, they are appealing. See Appendix A for

[[Page 1937]]

an example of a Preliminary Statement of Issues.

In addition to helping MMS and the appellant prepare for the record

development and settlement conferences, this requirement would would

help highlight those appeals in which it would be appropriate for the

MMS Director to take action to rescind or modify the order. This is

particularly important because appellants would not be required to

provide a Statement of Reasons which comprehensively briefs their legal

position until after the MMS Director has the opportunity to rescind,

modify, or concur with the order. Accordingly, it is in the appellant's

best interest to set out the issues and disagreements specifically,

because it will help to save litigation time and expense before the

IBLA.

The nonrefundable processing fee would be $150. You would have to

pay the processing fee as required under Sec. 4.965 or seek a fee

waiver or reduction under Sec. 4.966. Our analysis leading to the

choice of $150 as the processing fee at this stage of the appeal is in

the Section-by-Section analysis for Sec. 4.965 of this proposed rule.

Indian lessors would not have to pay the processing fee.

Unlike the Notice of Appeal, you would be allowed to request an

automatic extension of time of up to 60 days to file the Preliminary

Statement of Issues and to pay the processing fee. Any such request

would have to be in writing and be received by MMS within the time

allowed for filing the appeal. After the automatic extension, you could

request additional extensions subject to agreement by MMS.

Under paragraph (b), you would have to serve your Notice of Appeal,

Preliminary Statement of Issues, and any attached documents as required

under Sec. 4.962.

Under paragraph (d), if you are a designee, when you file your

appeal under paragraph (a), you would have to serve your Notice of

Appeal on the lessees who MMS identifies under proposed 30 CFR

242.105(a)(5)(i) in the order you appealed. We included this

requirement because lessees would have to join an appeal under

Sec. 4.908(a) within 30 days after they receive the designee's Notice

of Appeal. Thus, it is imperative that designees timely serve lessees

with the Notice of Appeal.

Section 4.908 If I am a Lessee, Can I Join a Designee's Appeal?

Under this section, if you are a lessee, and your designee files an

appeal under Sec. 4.904, you could join in that appeal within 30 days

after you received your designee's Notice of Appeal. You could join

that appeal by filing a Notice of Joinder with the MMS DRD as required

under Sec. 4.960. We added the joinder provision to protect lessees by

giving them the ability to continue the appeal if the designee decides

during some part of the appeals process that it no longer wishes to

pursue the appeal. As stated above, we included a requirement under

Sec. 4.907(c) that designees timely serve lessees with the Notice of

Appeal to facilitate the joinder process. Lessees also would be

required to serve their Notice of Joinder on all parties to the appeal

and other persons as required under Sec. 4.962.

Finally, lessees that neither appeal nor join in their designee's

appeal would be bound by their designee's actions with respect to the

appeal and any decisions in the appeal. In other words, if a lessee

neither appealed nor joined its designee's appeal, and the designee did

not pursue the appeal, or lost the appeal, the lessee could not

continue that appeal either in the Department or in district court.

Section 4.909 What is the Effect of Joining an Appeal?

Under this section, if you joined in an appeal under Sec. 4.908,

you would be deemed to appeal the order jointly with the designee.

However, as discussed in the Section-by-Section analysis for

Sec. 4.904, the designee would have to fulfill all requirements imposed

on appellants under this subpart. Thus, if you joined in your

designee's appeal, you could not file submissions or pleadings

separately from the designee. As discussed above, we limited the

submission of pleadings to designees to prevent numerous duplicative

submissions by multiple lessees of a single designee.

Finally, a lessee who has joined an appeal under Sec. 4.908 could

continue an appeal as an appellant if the designee notified the lessee

under Sec. 4.910(a) that it no longer wanted to pursue the appeal. If

the lessee wanted to continue the appeal, then it would become the

``appellant'' and would have to meet all requirements of this subpart.

Section 4.910 What Must a Designee do if it Decides to Discontinue an

Appeal?

Under this section, if you are a designee and you decide to

discontinue participation in the appeal at any time, you would have to

serve written notice on all lessees who have joined in the appeal under

Sec. 4.908, and on the office or officer with whom any subsequent

submissions or pleadings must be filed, no later than 30 days before

the next submission or pleading is due. The purpose of serving your

lessee if you wish to discontinue the appeal is to give the lessee

notice to allow the lessee to continue the appeal in your place under

Sec. 4.909(d). You also would have to serve the office where the next

pleading is due to allow that office to close the appeal if a lessee

does not continue the appeal under Sec. 4.909(d). Additionally, you

would have to serve your notice on all parties to the appeal and other

persons as required under Sec. 4.962.

Section 4.911 When Does My Appeal Commence?

This section would explain when your appeal commences for purposes

of the period in which the Department must issue a final decision in

your appeal under 30 U.S.C. 1724(h)(1) and Sec. 4.956 of this proposed

rule, or which the Department uses as guidance to track your appeal

under Sec. 4.948.

As explained above, under Sec. 4.907(a), the date your appeal would

be considered filed would be the date the MMS DRD receives all three

items you must file under Sec. 4.907(a)--the Notice of Appeal,

Preliminary Statement of Issues, and processing fee. Thus, paragraph

(a) of this section would provide that your appeal commences on the

date the MMS DRD receives the last of all the items you must file under

Sec. 4.907(a).

RSFA did not define ``commencement'' for purposes of the required

time for the Department to issue a final decision under RSFA Sec. 4(a),

adding FOGRMA Sec. 115(h), 30 U.S.C. 1724(h). RSFA states that:

The Secretary shall issue a final decision in any administrative

proceeding, including any administrative proceeding pending on the

date of enactment of this section, within 33 months from the date

such proceeding was commenced or 33 months from the date of such

enactment, whichever is later.

RSFA Sec. 4(a), 30 U.S.C. 1724(h)(1). An ``administrative proceeding''

is defined under RSFA as ``any Department of the Interior agency

process in which a demand, decision or order issued by the Secretary or

a delegated State is subject to appeal or has been appealed.'' RSFA

Sec. 2, adding FOGRMA Sec. 3(18), 30 U.S.C. 1702(18). 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)(1) or 1702(18). Rather,

``commence'' under Sec. 1702(20) deals with the ``commencement'' of

judicial proceedings or demands for purposes of the RSFA seven-year

limitations period under RSFA Sec. 4(a), adding FOGRMA

[[Page 1938]]

Sec. 115(b), 30 U.S.C. 1724(b). Accordingly, it is necessary for us to

define ``commencement'' in this proposed rule for purposes of

Sec. 1724(h).

We believe it is more efficient to define ``commencement'' as the

date all three items are filed, rather than defining ``commencement''

as the date when the appellant files the Notice of Appeal and then

requiring the appellant to seek extensions for all other items required

to actually commence the appeal. In addition, we cannot begin to

process an appeal until the appellant tells us what issues the

appellant is raising on appeal in its Preliminary Statement of Issues.

Thus, if you requested an automatic extension of time of 60 days within

which to file your Preliminary Statement of Issues, even though you

filed your Notice of Appeal and paid your processing fee, your appeal

would not ``commence'' until we received your Preliminary Statement of

Issues. The same would be true for processing fees so that if you

requested an automatic extension of time of 60 days within which to pay

your fee, your appeal would not commence until the date we received

your processing fee.

Paragraph (c) would tell you when your appeal commences if you

requested a fee waiver or reduction under Sec. 4.966. In such

instances, your appeal would not commence (assuming you already filed

your Preliminary Statement of Issues) until the date the MMS DRD

either: (1) grants your request for a waiver; (2) receives the reduced

fee if the MMS DRD grants your request for a reduction in the fee; or

(3) receives the entire fee if the MMS DRD denies your request for a

reduction in the fee.

Section 4.912 When Does My Appeal End?

This section would explain that your appeal ends on the same day of

the month of the 33rd calendar month after your appeal commenced under

Sec. 4.911, plus the number of days of any applicable time extensions.

Thus, if your appeal commenced on January 1, 1998, and you requested an

extension of time under Sec. 4.958 of 60 days within which to file your

Statement of Reasons, your appeal would ``end'' on November 30, 2000

(January 1, 1998 to October 1, 2000 (33 months), plus 60 days).

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. For example, if your appeal commenced on the 31st

of a month, but would end 33 months later in a month with only 30 days,

your appeal would end on the 30th day of the 33rd month, not on the

first day of the 34th month.

Section 4.913 What if a Due Date Falls on a Day the Department or

Relevant Office is Not Open for Business?

This section would explain that if a due date required under this

subpart falls on a day the relevant office is not open for business

(such as a weekend, Federal holiday, or shutdown), then due date would

be the next day the relevant office is open for business. Thus, if your

Statement of Reasons was due on December 25, 1998, a Federal holiday

falling on a Friday, you would be required to file it at the latest on

Monday, December 28, 1998. Likewise, if the IBLA is required to issue a

decision on December 25, 1998, the IBLA would be required to issue the

decision on Monday, December 28, 1998.

Section 4.914 What Will MMS Do After It Receives My Appeal?

This section would explain what the MMS DRD will do with your

appeal after it is received.

Paragraph (a) would explain that when MMS receives your appeal, it

will date stamp each document received (e.g., your Notice of Appeal and

Preliminary Statement of Issues, or request(s) for extension of time to

file your Preliminary Statement of Issues and/or processing fee). Date

stamping would document whether the appeal is timely filed and be used

to calculate the commencement and ending of the appeal. The MMS DRD

also would document receipt of your processing fee using any method it

deems appropriate for the method of payment. Payments by check would be

date stamped on the day received unless received after normal business

hours, in which case the date received would be the next business day.

For payments by Electronic Funds Transfer, MMS could rely on reports,

statements, or online inquiries through an Automated Clearing House or

Federal Reserve Wire network.

Paragraph (b) would state that the MMS DRD will decide whether your

appeal is filed on time. If the MMS DRD did not receive your Notice of

Appeal, Preliminary Statement of Issues, and processing fee, or your

request for extension of time to file your Preliminary Statement of

Issues or processing fee, or your request for a waiver or fee

reduction, by 5:00 p.m. (local time of the MMS DRD) on the 60th day

after you received the order, Notice of Order, or MMS decision not to

issue an order, your appeal would not be timely filed and would not be

considered. In such instances, MMS would notify you under paragraph (c)

that your appeal was not timely filed.

The RPC Report recommended that we notify appellants whether their

appeal is timely filed within 10 days of the Department's receipt of an

appeal. However, we decided not to impose a time requirement in this

proposed rulemaking because, although we expect we would usually meet

such a 10-day time frame, problems could arise which need further

investigation to determine whether the appeal was timely filed. To

avoid disputes over the consequences of any such delay, and because

there is no significant consequence to any party, we decided to omit

the 10-day requirement.

Although appeals would not be under the jurisdiction of MMS, the

designated office in MMS would determine whether the appeal was timely

filed. This is consistent with other IBLA regulations where appeals are

initially filed with the office that issued the decision or order under

appeal, and those offices determine whether the appeals are timely

filed. See e.g., 43 CFR 4.470.

If your appeal was timely filed, MMS would provide you with a

docket number for you to use in future correspondence related to your

appeal. The docket number would not be an MMS docket number but,

instead, would be a Departmental number. Thus, unlike the past appeals

process wherein MMS assigned your appeal an MMS docket number, and the

IBLA assigned it an IBLA docket number, you would use the Departmental

docket number MMS assigns your appeal through the entire appeal

process. This is because it is administratively simpler for both MMS

and IBLA to track an appeal through a coordinated docketing system.

With its notification of your docket number, MMS would also include

instructions regarding scheduling a record development conference and

settlement conference.

Section 4.915 How Will MMS Schedule Record Development Conferences?

Paragraph (a) would provide that if you file an appeal under this

subpart, MMS will schedule you to attend at least one record

development conference within 60 days of the commencement of your

appeal under Sec. 4.911. You would be allowed to extend this 60-day

period under Sec. 4.958.

Paragraph (b) would provide that you may request that record

development conferences take place via telephone, video conference, or

in person.

Paragraph (c) would provide that MMS will determine the time and

[[Page 1939]]

location of record development conferences and whether record

development conferences will take place via telephone, video

conference, or in person. MMS would not require you to travel without

your agreement.

Section 4.916 Who Must and Who May Participate in Record Development

Conferences?

This section would explain who must and who may participate in

record development conferences. Our goal is to allow interested

affected persons that have an ability to provide useful information,

views, or insights to participate in record and issue development.

Paragraph (a) would state that appellants and relevant MMS offices

must participate in record development conferences. We believe that

those persons must participate because they are the ones with the facts

and documentation necessary to develop the record.

Because other interested persons may wish to participate in record

development conferences, paragraph (b) would state that an affected

delegated State or affected State concerned, an affected Indian lessor,

and a lessee, designee, payor, or reporter, if not an appellant, could

participate in the record development conferences.

Paragraph (c) would state that any person who refuses to

participate in any record development conference as required under

paragraph (a) could not file any documents and materials for the

record. Under paragraph (d), any person who may participate as allowed

under paragraph (b) but doesn't participate in any record development

conferences may not file any documents or materials for the record.

This means that those parties could not file any documents, at any

time, including under Sec. 4.923. The purpose of paragraphs (c) and (d)

is to ensure that the record is as complete as possible by the end of

the record development process, rather than to allow persons who could

or should have participated in that process to add to the record at a

later date.

Section 4.917 How Will I Receive Notification of Record Development

Conferences?

The purpose of this section would be to identify who in the

Department has responsibility for notifying the various participants of

the record development conferences. Because MMS would have such

information, it would have the primary notification responsibility.

Thus, paragraph (a) would explain that after MMS schedules any record

development conference under Sec. 4.915, MMS will notify the appellant,

lessees that joined under Sec. 4.908, the office that issued the order,

affected delegated States, the persons that affected States concerned

identify under Sec. 4.961, and affected Indian tribes or appropriate

BIA offices of any record development conference.

MMS would not be responsible for notifying individual Indian

mineral owners that they may attend record development conferences

because it does not have the information necessary to contact those

persons. However, BIA does have that information. Thus, paragraph (b)

would provide that the appropriate BIA office that MMS notifies under

paragraph (a) would make available whatever notice to individual Indian

mineral owners it deems appropriate by any method it deems appropriate.

This proposal was based on the assumption that area BIA offices are in

the best position to know what type of notice would be useful. For

example, such notice could be in the form of notice in a local paper,

or posting notice on the internet that individual Indian mineral owners

could access at their local BIA office. We request comments on the most

appropriate way to provide useful notice to individual Indian mineral

owners about matters that may affect their revenues.

Section 4.918 How Will the Parties to the Appeal Develop the Record

During the Record Development Conferences?

The goals of the record development conference would be to (1)

identify and narrow the facts and issues that are in dispute in the

appeal, (2) agree to the extent possible on the facts and issues, and

(3) provide both sides the opportunity to put into the record documents

and other evidence that are relevant to the disputed facts and issues.

Although the proposed rule requires a minimum of one record development

conference, MMS envisions a record development ``process,'' the goal of

which is to have a complete record that all parties can agree upon.

Accordingly, we used the plural ``conferences'' because we believe that

there may be several record development conferences in the more

factually complex cases as part of the entire record development

process.

At the record development conferences, the parties would have to

identify all documents and evidence that are relevant to disputed legal

or factual issues involved in the appeal or that demonstrate material

facts. The purpose of this provision is to make it clear that the

parties must bring forward relevant information at this stage of the

appeal, rather than waiting until later in the process.

Relevant information would include information adverse to the

party's position on appeal that the party is aware of, and that was

considered in determining the party's position, that is not privileged

or prohibited by law. However, this would not create an affirmative

duty to seek out information adverse to the party's position that was

not considered as part of determining its position.

The requirement to provide information would not, however, preclude

a party from adding to the record at a later date in circumstances

where the party reasonably would not have known about the information

or its relevance to the case. In such instances, the party could

request that the IBLA allow it to supplement the record later under

Sec. 4.923.

Section 4.919 What Will the Parties Do If They Agree on the Record

Contents?

This section would require the parties to compile for the record

all material information relevant to the appeal and to file a Joint

Statement of Facts and Issues and a certification that the record is

complete. We believe this section is largely consistent with the RPC

Report recommendations because: (1) parties would file a Joint

Statement of Facts and Issues (see RPC Report paragraph 19.d); (2) the

record would have to include ``evidence in the work papers or otherwise

in the control of either party that bears upon the disputed facts or

issues'' (see RPC Report at paragraph 19.e); and (3) parties would

attempt to agree on evidence to be provided as part of the record (see

RPC Report paragraph 19.f).

Although MMS would usually be responsible for assembling the record

and drafting a Joint Statement of Facts and Issues, all parties would

be expected to be actively involved in the process, and the parties

could agree to allocate the responsibility differently. Thus, the

appellant or a delegated State could assemble the record or draft the

Joint Statement of Facts and Issues. Accordingly, under paragraph (a),

if the parties to the appeal agree on the contents of the record and

the facts and issues on appeal, MMS would be responsible for (1)

compiling all documents and materials to be included in the record, (2)

drafting a Joint Statement of Facts and Issues, and (3) filing the

record, Joint Statement of Facts and Issues, and certification that the

record is complete, with the MMS DRD within 30 days after the end of

the record development conferences. The parties could file the

certification jointly

[[Page 1940]]

or individually, but the MMS DRD would have to receive all parties'

certifications before it will deem the record complete. When MMS deems

the record complete it would send notice to all parties that the record

is complete. Thus, under the proposed rule, parties would only be able

to add to the record at later stages of the process if they submit a

request to the IBLA under Sec. 4.923 to add to the record with an

explanation of why they did not add the information during the record

development process. The RPC recommended both certification, RPC Report

paragraph 19.d., and admission to the record of additional information

after certification only upon a showing of ``good cause'' to the IBLA.

RPC Report paragraph 25.

We believe that requiring certification of the record will increase

the incentive for appellants and MMS to take the record development

process seriously and to bring forward all evidence and issues during

record development. Having a complete record early in the process will

provide several benefits. First, we believe that this can help to

filter out many cases at an early stage before the process of briefing

to the IBLA begins. Facts and issues brought up early in the process

can help either or both sides to see any errors in their positions,

which can facilitate early resolution of the case. Second, identifying

facts and issues at the record development stage will facilitate

settlement discussions, which also can obviate the need for more costly

briefing to and decision by the IBLA. Third, for cases that proceed to

briefing before the IBLA, we think that the briefing will be faster and

more efficient if the parties are aware of the facts and issues on

appeal before briefing begins. Front-loading the record-development

process as proposed here is intended to support efforts to decide

appeals faster and to meet the time frames set out elsewhere in this

rule. However, we understand that there may be cases where parties

identify new issues or facts that are relevant to the case after they

have certified the record. In such cases, the parties could petition

IBLA under Sec. 4.923 to allow them to add the facts or issues to the

record. We believe that Sec. 4.923 will insure an opportunity to

supplement the record in cases where the party can show a good reason

for not identifying the facts or issues at an earlier stage.

We recognize that the proposed process for certifying the record at

the record development stage could slow down the appeals process

because the requirement to ask the IBLA for permission to make

additional submissions, and explain to the IBLA the reason for the

request, requires additional time and cost for the requesting party to

prepare the request, and for the IBLA to act on that request.

Additionally, the appeals process may become quite complicated and get

bogged down in collateral disputes if the IBLA denies a party's request

to add to the record, or if another party objects to the request. We

further recognize that there may be practical difficulties in being

able to assemble all the pertinent facts or materials in the time frame

envisioned for the record development conferences, and we request

comments on this question.

Moreover, one of the primary goals of the record development

process is to develop a complete administrative record for any

subsequent judicial review of the Department's ultimate decision.

Accordingly, certifying that the record is complete at this early

stage, and then requiring parties to ``request'' to add to the record,

may be too onerous and ultimately contrary to the goal of

administrative record development. Therefore, we specifically request

comments on whether we should require parties to ``certify'' the record

at this early stage, and then require the parties to separately request

to add to the record at later stages of the appeals process. We also

specifically request comments on other alternatives, including not

requiring any certification and permitting documentary submissions at

later stages of the appeals process.

Section 4.920 What Will the Parties Do If They Do Not Agree on the

Record Contents?

This section would establish procedures for completing the record

in the event the parties cannot agree on the record contents. If the

parties to the appeal cannot agree on the contents of the record and

the facts and issues on appeal, then under this section, in addition to

submitting the material required under Sec. 4.919, each party would

have to prepare an Additional Statement of Facts and Issues and

supporting documents for the record and file them with the MMS DRD

within 30 days after the end of the record development conferences. In

addition, each party would have to certify that the Additional

Statement of Facts and Issues and supporting documentation it filed

comprises the complete record, except as provided in Sec. 4.923 of this

subpart. The MMS DRD would have to receive all parties' certifications

before it would deem the record complete. When the MMS DRD deemed the

record complete it would send notice to all parties that the record is

complete.

The RPC Report did not address the process for record development

when parties cannot agree on the record and facts and issues in

dispute. However, we wanted the record development process to be

inclusive, rather than exclusive. We have included the process in this

section in the proposed rule because, although it would not accomplish

the goal of agreement on the record and issues, it would still

accomplish the objective of producing as complete a record as possible

as early as possible in the appeals process. This process also would

avoid lengthy disputes in which the parties to the appeal would be

arguing over what the appeal is about or what should be in the record.

Section 4.921 What Must MMS or I Do If the Record Contains Proprietary

or Confidential Information?

This section would explain that if a party considers any of the

documents or materials compiled under this subpart to contain

proprietary or confidential information, that party would have to

follow the procedures under 43 CFR 4.31 to have that information

treated as such. On August 4, 1997, MMS proposed a separate rule on

this subject (62 FR 16116), but MMS withdrew that proposal on December

31, 1997 (62 FR 68244). We decided to rely on existing procedures under

43 CFR 4.31 rather than create new procedures.

Section 4.922 What if MMS or I Need More time to Develop the Record?

As proposed, the time to complete the record development process

would be 120 days, unless a party requested to extend the process.

Thus, under this proposed section, if an appellant requires additional

record development conferences (or additional time for any other part

of the record development process, such as for filing a Joint or

Additional Statement of Facts and issues or for certifying that the

record is complete) after that time period, then the appellant would

have to follow the procedures set out in Sec. 4.958 to request an

extension. The purpose of this paragraph is to ensure that the record

development process is flexible enough to allow the parties to develop

as complete a record as possible at this stage of the appeals process.

We did not want to cut off the record development process but needed to

make sure that the 33-month period in which to decide Federal oil and

gas appeals did not continue to run if the appellant needed more time

to complete the process.

[[Page 1941]]

Section 4.923 May Parties Supplement the Record or Statement of Facts

and Issues After the Record is Deemed Complete?

As discussed above in the Section-by-Section analysis for

Sec. 4.919, although parties would have to certify that the record is

complete at the end of the record development process, they could

request to later add to the record under this section. The RPC Report

stated that ``[a]bsent good cause, [appellants could] not raise new

issues or facts that were not raised when the administrative record was

developed'' in their Statement of Reasons. RPC Report at paragraph

22.d. The proposed rule would make that provision applicable to all

parties with the objective of encouraging early record development.

We recognize that there will be situations where additional

information or issues are identified after the record development

conference. Thus, this section would allow parties to supplement the

record at a later stage, provided that they can demonstrate adequate

reasons to the IBLA. Accordingly, under paragraph (a), if you are a

party, and you want to supplement the record or the Joint or Additional

Statement of Facts and Issues at any time after MMS deems the record

complete under Secs. 4.919 or 4.920 through the time additional

responsive pleadings are filed under Sec. 4.944, you would have to file

any additional material together with a written request for permission

with the IBLA (or an Assistant Secretary who is deciding the appeal

under Sec. 4.937) to supplement the record or the Joint or Additional

Statement of Facts and Issues. Paragraph (b) would state that a party's

request would have to explain why the additional documents, evidence,

facts or issues were not available or provided in the certified record

or in the Joint or Additional Statement of Facts and Issues and why

they are material to a decision on the appeal.

As previously discussed in connection with the proposed Sec. 4.919,

we recognize that this approach's practical result may be inefficient

or counterproductive to the goal of administrative record development.

We specifically request comments on whether we should require parties

to request to add to the record, and explain that request, after the

record development conferences are complete.

Paragraph (c) would provide that if you are an appellant, you would

have to agree in writing to extend the period for the Department to

issue a final decision in your appeal under 30 U.S.C. 1724(h)(1) by 45

days, and include that agreement with your request. The purpose of this

paragraph is to ensure that the record development process is flexible

enough to allow the parties to develop as complete a record as possible

but make sure that the 33-month period in which to decide federal oil

and gas appeals does not continue to run if the appellant needs

additional time to add to the record.

We propose 45 days for the extension of time under paragraph (c)

because that time frame would allow the IBLA to act on the request and

other parties to respond to the additional submissions. Thus, paragraph

(d) would provide that you must serve your request on all parties to

the appeal. Paragraph (e) would provide that the IBLA would issue an

order either granting or denying your request to supplement the record

or Joint or Additional Statement of Facts and Issues under this section

within 30 days of its receipt of your request. If the IBLA did not

issue an order either granting or denying your request within 30 days

of its receipt of your request, your request would be deemed granted.

Then, under paragraph (f), if the IBLA granted a request or a request

was deemed granted under paragraph (e), any party to the appeal could

respond to a party's additional documents, evidence, facts or issues

within 15 days of its receipt of the IBLA's order, or, if the IBLA did

not issue an order, within 45 days of the party's receipt of the

request.

Section 4.924 How Will MMS Schedule a Settlement Conference?

RSFA Sec. 4(a), adding FOGRMA Sec. 115(i), 30 U.S.C. 1724(i),

requires that parties to disputed obligations under orders subject to

RSFA ``hold not less than one settlement consultation.'' However, the

RPC recommended we propose to make at least one settlement conference

mandatory for all appeals, not just appeals involving Federal oil and

gas production subject to RSFA. Our reason is that participation in a

settlement conference imposes little additional burden on any party but

may yield substantial benefits in terms of the time and expense of

resolving the dispute. We seek comments on whether we should extend

this RSFA requirement to all appeals. In particular we specifically

request comments on whether this requirement should be mandatory for

Indian appeals.

Accordingly, paragraph (a) would state that if you file an appeal

under this subpart, MMS will schedule you to attend a settlement

conference within 120 days of the commencement of your appeal under

Sec. 4.911. You would be allowed to extend this 120-day period under

Sec. 4.958. Thus, attendance at one settlement conference would be

mandatory for all appeals. However, we would encourage as many

settlement conferences as necessary to facilitate early resolution of

disputes. We included the provision requiring an extension of the 33-

month period because we did not want to cut off the settlement process,

but needed to make sure that the 33-month period in which to decide

federal oil and gas appeals did not continue to run if the appellant

needed more time to complete the process.

Under paragraph (b), you could request that the settlement

conference take place via telephone, video conference, or in person.

However, under paragraph (c), MMS ultimately would determine the time

and location of the settlement conference and whether the settlement

conference will take place via telephone, video conference, or in

person. MMS would not compel you to travel (i.e., MMS might suggest

that the conference be in person at a location remote from the

appellant, but if the appellant chose not to travel, MMS would

accommodate that choice).

To increase the flexibility and efficiency of the settlement and

appeals process, MMS added paragraph (d) to provide that the settlement

conference could be held as part of the record development conference

scheduled under Sec. 4.915 if you and MMS agree to do so. MMS believes

that, in many instances, the record development conference and

settlement conference would be concurrent because all necessary parties

would be present to discuss the issues, facts, and possible early

resolution of the dispute.

Section 4.925 Who Must and Who May Participate in the Settlement

Conference?

This section would explain who must and who may participate in

settlement conferences. Our goal is to allow interested affected

persons that have an ability to provide useful information, views, or

insights to participate in settlement conferences.

Paragraph (a) would state that appellants and relevant MMS offices

must participate in settlement conferences, as required under RSFA

Sec. 4(a), adding FOGRMA Sec. 115(i), 30 U.S.C. 1724(i).

Because States concerned and other interested persons may wish to

participate in settlement conferences, paragraph (b) would state that

affected delegated States or affected States concerned, affected Indian

lessors, and a lessee, designee, payor, or reporter (if

[[Page 1942]]

not an appellant) may participate in the settlement conferences.

RSFA Sec. 4(a), FOGRMA Sec. 115(i), provides that for royalties due

on production after September 1, 1996, ``the parties shall hold not

less than one settlement consultation and the Secretary and the State

concerned may take such action as is appropriate to compromise and

settle a disputed obligation * * *.'' However, that language does not

grant States authority to settle a dispute or give the State a ``veto''

over the Secretary settling a dispute. Rather, the Secretary must

determine what is the appropriate action and has determined that it is

not mandatory for States concerned to participate in settlement

conferences. Thus, if States concerned want to participate, they could

do so under paragraph (b).

Section 4.926 How will I Receive Notification of Settlement

Conferences?

The purpose of this section is to identify who in the Department

has responsibility for notifying the various persons of the settlement

conferences. Because MMS would have such information, it would have the

primary notification responsibility. Thus, paragraph (a) would explain

that after MMS schedules a settlement conference under Sec. 4.924, MMS

will notify the appellant, lessees that joined under Sec. 4.908, the

office that issued the order, affected delegated States, the persons

that affected States concerned identify under Sec. 4.961, and affected

Indian tribes or appropriate BIA offices of the settlement conference.

MMS would not be responsible for notifying individual Indian

mineral owners that they may attend settlement conferences because it

does not have the information necessary to contact those persons.

However, BIA does have that information. Thus, paragraph (b) would

provide that the appropriate BIA office that MMS notifies under

paragraph (a) would make available whatever notice to individual Indian

mineral owners it deems appropriate by any method it deems appropriate.

This proposal was based on the assumption that area BIA offices are in

the best position to know what type of notice would be useful. For

example, such notice could be in the form of notice in a local paper,

or posting notice on the Internet that individual Indian mineral owners

could access at their local BIA office. We request comments on the most

appropriate way to provide useful notice to individual Indian mineral

owners about matters that may affect their revenues.

Section 4.927 May Parties Resolve an Appeal by Settlement or Using

Third Party Neutrals After the Settlement Conference?

Although RSFA Sec. 4(a), adding FOGRMA Sec. 115(i), 30 U.S.C.

1724(i) requires at least ``one settlement consultation,'' MMS wants to

make clear that it will engage in settlement negotiations whenever

appropriate throughout the appeals process. Thus, paragraph (a) would

provide that parties may resolve any appeal by settlement at any time

before the Department has issued a final decision.

Under paragraph (b), any party could participate in settlement

negotiations at any stage of the appeal. Also, MMS could use any

personnel or officials it deems appropriate for settlement

negotiations, including representatives of tribes and delegated States.

Like the mandatory settlement conference, the Secretary has determined

under this proposed rulemaking that it is not mandatory for States

concerned to participate in settlement negotiations. However, MMS would

consult with States concerned regarding any settlement negotiations and

could invite States concerned to participate under this paragraph.

We are proposing paragraph (c) to provide for alternative dispute

resolution options other than settlement negotiations. Accordingly, in

addition to negotiated settlements, at any stage of the appeal, MMS

could use third party neutrals under the Administrative Dispute

Resolution Act, 5 U.S.C. 571 et seq., if both MMS and the other parties

to the appeal agreed to do so. Thus, parties would not be forced to

refer disputes to an arbitrator or mediator. If MMS used third party

neutrals, MMS could use the Alternative Dispute Resolution Official

from the OHA, or persons named on the roster of third party neutrals

that OHA maintains.

Section 4.928 What if I Need More Time to Consider Settlement?

This section would explain how to postpone any filing requirements

and the deadline for the Department to issue a final decision in your

appeal while settlement efforts are ongoing. To do this, you would have

to obtain an extension under Sec. 4.958. We included this provision

because we did not want to cut off the settlement process but needed to

make sure that the 33-month period in which to decide Federal oil and

gas appeals did not continue to run if the appellant needed more time

to complete the process.

Section 4.929 May the MMS Director Concur With, Rescind, or Modify an

Order or Decision Not to Issue an Order that I Appealed?

One of the goals of the RPC was elimination of the current two-step

royalty appeals process wherein an appellant must appeal to the MMS

Director, brief that appeal, and receive a decision that is then

appealable to the IBLA. Once at the IBLA, appellants must then brief

the appeal to the IBLA.

To eliminate the two-step briefing process, yet allow MMS the

opportunity to rescind or modify an order after record development, the

RPC Report recommended that MMS prepare an internal recommendation on

whether an order should be upheld, modified, or rescinded. RPC Report

paragraph 21. The RPC Report then recommended that after appropriate

consultation with States and tribes, the MMS Appeals Division could

rescind or modify an order. Id. However, this process would have

involved asking the IBLA to remand the appeal, which would be

burdensome and time consuming. Also, the internal memorandum would not

be shared with the appellant. In his letter of September 22, 1997, the

Secretary stated that rather than writing an internal memorandum MMS

would issue a letter decision to appellants with copies to appropriate

Indian lessors and delegated States stating whether the MMS Director

had modified or rescinded the order or decision not to issue an order.

Thus, under paragraph (a), although appeals are not to the MMS

Director, this rule is proposing that the MMS Director, within 60 days

of the date that the MMS DRD has received the record under Secs. 4.919

or 4.920, may concur with, rescind, or modify the order or decision not

to issue an order that you have appealed. We felt that MMS should have

up to this point to unilaterally act on an order without leave of the

IBLA. We also believe that the short 60-day time period within which

the MMS Director would have to act was necessary because of the RSFA

33-month period within which to decide Federal oil and gas appeals and

the Department's and RPC's desire to decide appeals more quickly than

the current process. Although neither the RPC report nor the Secretary

addressed the process for the MMS Director to concur with orders, we

believe that in addition to issuing letters modifying or rescinding

orders, as part of MMS's review practice, MMS should be authorized to

issue letters concurring with orders.

[[Page 1943]]

The purpose of allowing the MMS Director to rescind or modify the

order or decision not to issue an order would be to: (1) formally

communicate our reasons for rescission or modification to appellants;

(2) eliminate the need to request remand from the IBLA; (3) allow MMS

an opportunity to review orders for accuracy and conformity with MMS

policy prior to formal briefing to the IBLA; and (4) help resolve

appeals or issues prior to formal briefing to the IBLA. The early

resolution of appeals is particularly important given RSFA's 33-month

time constraint.

Moreover, under the current appeals process, MMS appeals decisions

and settlement agreements have resolved more than three-fourths of the

complex appeals filed with MMS prior to appeal to the IBLA. MMS hopes

that its ability to review and rescind or modify orders in this

proposed rule, together with the settlement conferences, will yield a

similar result.

The purpose of having the MMS Director affirmatively concur with

orders is to speed up the appeals process and give appellants clear

documentation of the concurrence (compared to ``deemed'' concurrences

under paragraph (e), described below).

Paragraph (b) would provide that MMS will consult informally with

the MMS office that issued the order or decision not to issue the

order, and with affected tribes or affected delegated States that

participated in the record development conference or the settlement

conference before the MMS Director rescinds or modifies an order or

decision not to issue an order under paragraph (a). This is

substantially what the RPC Report recommended, RPC Report paragraph

21.a, except that MMS would not have to consult with affected tribes or

affected delegated States that show no interest in the proceedings by

failing to participate in the early part of the appeals process. MMS

also would not be required to consult with States concerned. This would

conserve MMS resources by eliminating the need to inform persons that

did not issue the order, participate in the audit that resulted in the

order, or participate in the appeals process. This would also encourage

interested affected tribes and affected delegated States to participate

early in the process and thereby produce more meaningful record

development and settlement conferences. However, paragraph (c) would

give MMS discretion to consult informally with other relevant MMS

offices, States concerned, and affected Indian lessors before the MMS

Director rescinds or modifies an order or decision not to issue an

order.

Under the current appeals process, for appeals involving Indian

leases, MMS prepares the decision, and the Deputy Commissioner of

Indian Affairs signs the decision, after the Solicitor, Division of

Indian Affairs, reviews the decision. In this proposed rule, the MMS

Director would concur with, rescind or modify appeals involving Indian

leases. We specifically request comment on what the extent of BIA

involvement regarding such appeals should be. For example, should MMS

be required to ``consult informally'' with appropriate BIA officials

prior to acting on an order under paragraph (b), or should such

consultation be at MMS's discretion under paragraph (c)?

Under paragraph (d), MMS would notify appellants in writing that

the MMS Director has concurred with, rescinded or modified the order or

decision not to issue an order they appealed. A notice of rescission or

modification would state the reasons for the rescission or

modification. However, we anticipate that these letters would be

shorter and would include less written legal analysis than current MMS

appeals decisions.

We included paragraph (e) to explain what happens if the MMS

Director does not concur with, rescind or modify the order or decision

not to issue an order within the 60-day time frame provided in

paragraph (a). In such instances, the MMS Director would be deemed to

have concurred with the order or decision not to issue an order that

you have appealed.

Section 4.930 What Other Persons Will MMS Notify When the MMS Director

Concurs With, Rescinds, or Modifies an Order or Decision Not to Issue

an Order?

The purpose of this section is to identify the persons, other than

the appellant that the Department will notify when the MMS Director

concurs with, rescinds, or modifies an order or decision not to issue

an order. This would include persons who would not otherwise be aware

of such action because they did not receive an order, Notice of Order,

or Notice of Appeal. Because MMS would have such information, it would

have the primary notification responsibility.

Paragraph (a) would provide that, for appeals filed under

Sec. 4.904(a) or (b) (i.e., by parties other than Indian lessors), MMS

will send a copy of the notice that it issues under Sec. 4.929(d) to

the following persons: (1) the office that issued the order; (2) any

affected delegated State; (3) any affected Tribe; and (4) the

appropriate BIA office, if the order involves leases on individual

Indian lands. The BIA office may make available to individual Indian

mineral owners whatever notice it deems appropriate by any method it

deems appropriate. MMS would not be responsible for notifying

individual Indian mineral owners because it does not have the

information necessary to contact those persons. However, BIA does have

that information. This proposal was based on the assumption that BIA

area offices are in the best position to know what type of notice would

be useful. For example, such notice could be in the form of notice in a

local paper, or posting notice on the Internet that individual Indian

mineral owners could access at their local BIA office. We request

comments on the most appropriate way to provide useful notice to

individual Indian mineral owners about matters that may affect their

revenues.

Paragraph (b) would provide that for appeals filed by Indian

lessors under Sec. 4.904(c), MMS will send a copy of the notice it

issues under Sec. 4.929(d) to the office that decided not to issue the

order and to the lessee or its designee.

Section 4.931 If the MMS Director Rescinds or Modifies an Order, How

Does it Affect the Statutory Limitations Period?

RSFA Sec. 4(a), adding the new FOGRMA Sec. 115(b)(1), 30 U.S.C.

1724(b)(1), provides that MMS must commence a demand for an obligation

within seven years from the date the obligation becomes due. Thus,

orders subject to RSFA must be issued within seven years of the date

that additional royalties became due. For purposes of this rulemaking,

we needed to clarify the effect of the MMS Director's rescission or

modification of orders subject to the seven-year limitations period

under RSFA.

Accordingly, for purposes of determining whether an order is timely

under the limitations period prescribed in 30 U.S.C. 1724(b)-(d),

paragraph (a) of the proposed section would state that if the MMS

Director modifies an order under Sec. 4.929, the timeliness of the

order is not affected and the modified order is timely if the original

order was timely. For example, assume that MMS issued an order to pay

additional royalty of $10,000 on January 1, 1998, for royalties that

were due on January 1, 1991 from lease X.

Also assume that the designee appealed the order, and that the MMS

Director modified the order to find that the lessee underpaid royalties

on lease X for the same production by $15,000, not the $10,000 under

the order as issued, and to require the lessee to pay the higher

amount. In that instance,

[[Page 1944]]

because the original order was timely, the modification would be

timely, even though it increased the amount of royalties due. However,

the MMS Director's modification would not address production not

included in the original order. Thus, using the above example, the MMS

Director could not modify the order to include additional royalties on

production from lease Y, because that production was not included in

the original order. Similarly, the Director could not modify the order

to include production from lease X for a time period different than the

time period in the original order.

Paragraph (b) would provide that for purposes of determining

whether an order is timely under the limitations period prescribed in

30 U.S.C. 1724(b)-((d), if the MMS Director rescinded all or part of an

order under Sec. 4.929, and the IBLA, an Assistant Secretary, the

Director of OHA, the Secretary, or a court reinstates that order, in

whole or in part, the reinstated order relates back to the date the

order was originally issued, and the reinstated order would be timely

if the original order was timely. Thus, as long as an appeal (or

intervention) of the rescission was pending within the Department or in

federal court, an order would stay ``alive'' for purposes of the 7-year

limitations period even though the MMS Director rescinded that order.

Section 4.932 When Will MMS Send the Record to IBLA?

Under this section, the MMS DRD would transmit the record to the

IBLA within 45 days of the date MMS notifies the appellant under

Sec. 4.929(d). If the MMS Director is deemed to have concurred with an

order under Sec. 4.929(e), this section would require that the MMS

Dispute Resolution Division transmit the record to the IBLA within 105

days after MMS has received the record under Sec. 4.919 or 4.920. The

45-day deadline under this paragraph would merely be guidance for MMS

and would create no substantive rights in parties to the appeal or any

other persons.

Section 4.933 What Must I Do, or What May I Do, After the MMS Director

Concurs With, Rescinds or Modifies an Order or Decision Not To Issue an

Order That I Have Appealed?

This section would explain what an appellant could do regarding the

appeal of its order after the MMS Director concurs with, modifies or

rescinds an order under Sec. 4.929. Depending on the MMS Director's

action, and whether the appellant desires to continue the appeal, there

are several options for the appellant. First, under paragraph (a), if

the MMS Director concurred with the order or decision not to issue an

order that you appealed, and you wanted to continue your appeal, you

would have to file your Statement of Reasons under Sec. 4.939 with the

IBLA within 60 days after you received the MMS Director's concurrence

under Sec. 4.929. The 60-day time period is intended to provide

sufficient time for you to determine what action you intend to take and

to prepare your Statement of Reasons.

Second, under paragraph (b), if the MMS Director rescinded the

order that you appealed, and if an Indian lessor or delegated State

intervened under Sec. 4.934, because you would be bound by the

Department's final decision in the intervention in your appeal, you

could file an Answer to the Intervention Brief under Sec. 4.942 within

60 days after you receive the MMS Director's rescission under

Sec. 4.929(d). We assume that appellants would not appeal a recission

to IBLA. However, we realize that the substantive rights of appellants

may be affected if an Indian lessor or delegated State intervenes under

Sec. 4.934. Thus, we wanted to ensure that appellants have the

opportunity to address any arguments for reinstatement of a rescinded

order an Intervenor makes to IBLA in its Intervention Brief. But we

also wanted to make clear that if an appellant chooses not to answer an

Intervention Brief, it would still be bound by any IBLA decision

regarding the rescission.

Third, under paragraph (c), if the MMS Director modified the order

that you appealed, and if you still wanted to contest the order as

modified, you would have to file your Statement of Reasons under

Sec. 4.939, and any Answer to an Intervention Brief under Sec. 4.942,

within 60 days after you receive the MMS Director's modification under

Sec. 4.929. The 60-day time period is intended to provide sufficient

time for you to determine what action you intend to take and to prepare

your Statement of Reasons and any Answer to an Intervention Brief.

Finally, under paragraph (d), if the MMS Director was deemed under

Sec. 4.929(e) to have concurred with the order or decision not to issue

an order that you appealed, you would have to file your Statement of

Reasons under Sec. 4.939 within 120 days after the date the MMS DRD

receives the record forwarded under Secs. 4.919 or 4.920. Thus, if MMS

did not notify you of its concurrence, modification, or rescission of

the order within the time required under Sec. 4.929, then you would

have 60 days from the date that the notification should have been sent

to file a Statement of Reasons with the IBLA. This would give an

appellant sufficient time to determine whether the appeal was deemed

concurred with under Sec. 4.929(e), determine what action it intends to

take, and prepare its Statement of Reasons.

Section 4.934 Who May Intervene in an Appeal?

The purpose of this section is to provide a means for Indian

lessors and affected delegated States to object to an MMS Director's

rescission or modification of an order without having to make the

Indian lessor or State file a separate appeal of some kind. We felt it

would be too confusing and administratively difficult to track dual

appeals regarding the same order for purposes of the 33-month period

within which to decide appeals of orders concerning federal oil and gas

leases. The RPC Report, paragraph 21.e, recommended that delegated

States be allowed to ``continue'' an appeal. However, we believe that

Indian lessors and affected delegated States are not ``appellants''

when they disagree with an MMS rescission or modification because there

already is an ``appellant.'' Rather, they should be regarded as

intervenors because they did not appeal the order but challenge MMS's

action with respect to an order. See e.g., 43 CFR 4.471 and 4.1110.

This achieves the same effect as the RPC Report recommendation,

but, under the proposed rule, appellants have different substantive

rights and procedures than intervenors. For example, under various

sections of the proposed rule, if an appellant wants additional time to

comply with a filing deadline, hold additional record development or

settlement conferences, etc., then, under Sec. 4.958, the appellant

must request an extension of the period in which the Department must

issue a final decision in its appeal under Sec. 4.956, or which the

Department uses as guidance to track its appeal under Sec. 4.948. There

is no such requirement for Intervenors because they cannot extend the

33-month period. Thus, the Departmental office considering an extension

request from an Intervenor would have discretion whether to grant the

request considering, among other factors, whether the Intervenor

obtained a written agreement from the appellant to extend the 33-month

period. Accordingly, under paragraph (a), Indian lessors could

intervene in any appeal involving their leases by filing an

Intervention Brief under Sec. 4.939 within 30 days after receiving

notification of the MMS Director's concurrence, rescission or

modification of an order

[[Page 1945]]

under Sec. 4.930 that adversely affects them. Likewise, paragraph (b)

would provide that affected delegated States could intervene in an

appeal if the MMS Director modified or rescinded an order under

Sec. 4.929 that the recipient of the order or Notice of Order appealed,

by filing an Intervention Brief under Sec. 4.939 within 30 days after

the delegated State received MMS's notification of any rescission or

modification under Sec. 4.930, if MMS's rescission or modification of

the order adversely affected that State.

We believe that only Indian lessors and delegated States that are

adversely affected by the MMS Director's actions regarding an order

should be allowed to intervene. Thus, an Indian lessor whose leases are

not at issue in the appeal, or a delegated State that does not receive

revenues from the leases at issue in the appeal, could not intervene.

However, if an unaffected Indian lessor or delegated State wished to

express views about the merits of MMS's actions, it could file an

amicus brief under Sec. 4.943.

Section 4.935 What is the Record for an Appeal if a State or Indian

Lessor Intervenes?

Because a record already exists for an appeal when an Indian lessor

or a delegated State intervenes, this section would provide that if an

Indian lessor or delegated State intervenes under Sec. 4.934, the

record for the appeal that the IBLA must consider is the record

established under Secs. 4.919 or 4.920 before the MMS Director's

rescission or modification under Sec. 4.929, plus any additional

correspondence to the MMS Director and the MMS Director's notice of

modification or rescission under Sec. 4.929(d).

Section 4.936 If an Indian Lessor or Delegated State Intervenes, How

Does it Affect the Time Frame for Deciding an Appeal?

As explained above, we believe that Indian lessors and affected

delegated States are not ``appellants'' when they disagree with an MMS

rescission or modification because there already is an ``appellant.''

Thus, this section would provide that when an Indian lessor or

delegated State intervenes, the appeal commences on the appellant's

commencement date under Sec. 4.911, not on the date an intervening

party files its Intervention Brief. Thus, intervention would not

``recommence'' an appeal.

Section 4.937 May an Assistant Secretary Decide an Appeal?

Under the current two-step appeals process, an Assistant Secretary

may take jurisdiction of an appeal and issue a decision at any time

prior to an appeal to the IBLA. Marathon Oil Co., 108 IBLA 177 (1989),

Blue Star, Inc., 41 IBLA 333, 335-36 (1979). The RPC recommended that

if an Assistant Secretary wanted to decide an appeal, the Assistant

Secretary would have to petition the IBLA to relinquish jurisdiction of

the appeal. RPC Report, paragraph 30. However, in his letter of

September 22, 1997, the Secretary stated that the Department would

allow an Assistant Secretary to choose to decide an appeal without

leave from the IBLA, at any time prior to the Appellant's filing of its

Statement of Reasons or an Intervenor's filing of its Intervention

Brief with the IBLA. We believe that if policy-level officials in the

Department choose to make a decision in a case, there should be no need

for them to be granted permission. This also is similar to the

procedures for certain other Departmental appeals. See 43 CFR 4.332(b).

Accordingly, paragraph (a) of this section would provide that the

Assistant Secretary for Land and Minerals Management (or, the Assistant

Secretary for Indian Affairs for appeals involving an Indian lease)

could choose to decide an appeal by notifying the appellant, the MMS

Dispute Resolution Division, and the IBLA in writing that the Assistant

Secretary will decide the appeal, at any time up to 30 days before the

date the appellant must file its Statement of Reasons or an Intervenor

must file its Intervention Brief under Sec. 4.939. The 30-day

notification would give appellants and Intervenors time to prepare

their Statement of Reasons or Intervention Brief for filing with the

Assistant Secretary, rather than with the IBLA. The proposed rule does

not specify how an Assistant Secretary would determine to decide an

appeal, but we believe any party, including the appellant, could

request that an Assistant Secretary decide the appeal.

We believe that the appellant should argue its case to the

Assistant Secretary in much the same way as it would argue the matter

to the IBLA. Thus, paragraph (b) of this section would provide that,

after the Assistant Secretary notifies you of his or her decision to

decide your appeal, you must file all subsequent documents required

under this subpart with the Assistant Secretary under Sec. 4.960.

In a public meeting we held on earlier drafts of this proposed

rule, industry representatives expressed concern over the extent of ex

parte communications from the MMS and the Solicitor's office to the

Assistant Secretary when an Assistant Secretary decides an appeal.

Under the proposed procedure, appellants would be able to submit the

same arguments to the Assistant Secretary as they would submit to the

IBLA. While the procedures would differ from those before the IBLA

because there would be no bar on agency or Solicitor's office personnel

working with the Assistant Secretary on a decision, any Assistant

Secretary's decision would have the benefit of being subject to

immediate judicial review. Moreover, it is critical to the Assistant

Secretary's decision making process that he or she have available the

expertise of both the agency personnel and his or her attorneys. We

specifically request comments about any procedures that the Department

should consider regarding how it can maintain an efficient and fair

process, while providing adequate staff support to the Assistant

Secretary, and preserving the Assistant Secretary's prerogative to

consult with whomever he or she chooses within the Department.

Section 4.938 Who Will Notify Other Persons That an Assistant

Secretary Will Decide an Appeal or Has Decided an Appeal?

The purpose of this section is to identify who in the Department

has responsibility for notifying affected persons other than the

appellant that an Assistant Secretary will decide an appeal or has

decided an appeal, who would not otherwise be aware of such action.

Because MMS would be notified of such action, it would have the primary

notification responsibility.

Thus, paragraph (a) would explain that MMS will transmit a copy of

the Assistant Secretary's notice required under Sec. 4.937 to:

(1) Affected tribes;

(2) Affected delegated States;

(3) Lessees who join under Sec. 4.908;

(4) Intervenors; and

(5) Affected lessees or their designees if an Indian lessor files

an appeal under Sec. 4.904 of any MMS decision not to issue an order.

Paragraph (b) would provide that for appeals involving individual

Indian mineral owners' leases, in addition to notifying the persons

under paragraph (a), MMS would transmit a copy of the Assistant

Secretary's notice required under Sec. 4.937 to the appropriate BIA

office. That BIA office could make available to individual Indian

mineral owners whatever notice it deems appropriate by any method it

deems appropriate. MMS would not be responsible for notifying

individual Indian mineral owners because it does not have the

information necessary to contact those persons. However, BIA does have

that information. Thus, this

[[Page 1946]]

proposal was based on the assumption that area BIA offices are in the

best position to know what type of notice would be useful. For example,

such notice could be in the form of notice in a local paper, or posting

notice on the Internet that individual Indian mineral owners could

access at their local BIA office. We request comments on the most

appropriate way to provide useful notice to individual Indian mineral

owners about matters that may affect their revenues.

Section 4.939 How Do I File My Statement of Reasons or Intervention

Brief?

This section would explain how an appellant would file its

Statement of Reasons, and an Intervenor would file its Intervention

Brief, with the IBLA or an Assistant Secretary.

Under paragraph (a), you would have to file your Statement of

Reasons or Intervention Brief with the IBLA under Sec. 4.960 within the

times required under Secs. 4.933 and 4.934.

Under paragraph (b), if an Assistant Secretary will decide your

appeal under Sec. 4.937, you would have to file your Statement of

Reasons or Intervention Brief with that Assistant Secretary under

Sec. 4.960 within 60 days after the MMS DRD has received the record

under Secs. 4.919 or 4.920.

Under paragraph (c), appellants would have to pay a nonrefundable

processing fee of $150 with their Statement of Reasons as required

under Sec. 4.965 or seek a fee waiver or reduction under Sec. 4.966.

Our analysis leading to the choice of $150 as the processing fee at

this stage of the appeal is in the Section-by-Section analysis for

Sec. 4.965 of this proposed rule. Indian lessors and delegated States

would not have to pay the processing fee.

Under paragraph (d) you also would have to serve your Statement of

Reasons or Intervention Brief on all parties to the appeal, and on

other persons as required under Sec. 4.962. Section 4.962 requires

appellants to serve their Statement of Reasons on the office that

issued the order, affected tribes, and affected delegated States. The

current rules do not require appellants to serve the Statement of

Reasons on these entities. However, we added this requirement to ensure

that the office that issued the order, affected tribes, and affected

delegated States would be informed about the progress of the appeal and

to provide them with an opportunity to give the Solicitor's office

information they believe is responsive to the Statement of Reasons or

file an amicus brief under Sec. 4.943.

Section 4.940 What if I Do Not Timely File My Statement of Reasons,

Intervention Brief or Request for an Extension of Time to File Those

Documents?

This section would explain that if you do not file your Statement

of Reasons, Intervention Brief, or request for extension of time to

file either of those documents within the times prescribed in

Secs. 4.933, 4.934, or 4.939, or within any extension of time requested

and granted under Sec. 4.958, the IBLA or the Assistant Secretary will

dismiss your appeal, or will not allow you to intervene. Thus, the

filing of the Statement of Reasons would be jurisdictional. We would

like comments on whether this is the appropriate sanction for failure

to timely file, or whether we should have another sanction for not

filing timely. For example, the rule could provide that the IBLA or

Assistant Secretary would not consider Statements of Reasons or

Intervention Briefs that are filed late. This would tend to have a

similar substantive result as dismissal but might be more time

consuming.

Section 4.941 Who May File an Answer to a Statement of Reasons or

Intervention Brief?

This section would explain who may file an Answer to a Statement of

Reasons or Intervention Brief with the IBLA or an Assistant Secretary.

Like current practice, the Solicitor's office would file Answers on

behalf of MMS and Indian lessors.

Paragraph (a) would provide that if the recipient of an order or

Notice of Order files a Statement of Reasons under Sec. 4.939, MMS and

Indian lessors whose leases are affected may file Answers under

Sec. 4.942.

Paragraph (b) would provide that if an Indian lessor files a

Statement of Reasons or an Intervention Brief under Sec. 4.939, MMS and

any lessee, designee, or payor for the lease(s) involved in the appeal

may file Answers under Sec. 4.942. The proposed rule would allow

lessees or payors to answer Indian lessors' Statements of Reasons and

Intervention Briefs because, under Sec. 4.933(b), they would be bound

by the Department's final decision in the intervention in their appeal.

Also, if an Indian lessor appeals MMS's decision not to issue an order

regarding its leases, lessees or payors would likewise be bound by any

decision in that appeal. Thus, the substantive rights of lessee and

payor appellants could be affected if an Indian lessor intervenes under

Sec. 4.934 or appeals under Sec. 4.904(c). Accordingly, we wanted to

assure that those appellants have the opportunity to address any

arguments an Intervenor or Indian lessor appellant makes to the IBLA or

Assistant Secretary.

Paragraph (c) would provide that if a delegated State files an

Intervention Brief under Sec. 4.939, MMS, Indian lessors whose leases

are adversely affected, and any lessee, its designee, or the payor for

the lease(s) involved in the appeal may file Answers under Sec. 4.942.

The proposed rule would allow lessees, their designees, or the payor to

answer delegated States' Intervention Briefs because, under

Sec. 4.933(b), they would be bound by the Department's final decision

in the intervention in their appeal. Thus, the substantive rights of

lessee, designee, and payor appellants could be affected if a delegated

State intervenes under Sec. 4.934. Accordingly, we wanted to assure

that those appellants have the opportunity to address any arguments an

Intervenor makes to the IBLA or Assistant Secretary in its Intervention

Brief.

Indian lessors' leases could be adversely affected by the

Intervention of a delegated State only if the appeal involves an order

that addresses both Federal and Indian leases (a State could not file

an Intervention Brief in an appeal involving only Indian leases). While

we do not expect that the positions of Indian lessors and delegated

States would often conflict, because Indian lessors are the lease

owners, we thought they should have the opportunity to address

Intervention Briefs filed by delegated States in appeals that involve

both Federal and Indian leases.

Section 4.942 How Do I File an Answer to a Statement of Reasons or

Intervention Brief?

This section would explain that you would have to file your Answer

to a Statement of Reasons within 60 days after the date the Statement

of Reasons was served upon you, and an Answer to an Intervention Brief

within the time limit proposed in Sec. 4.933(b) (i.e., within 60 days

after you receive the MMS Director's rescission). This section also

would provide that you must file your Answer with the appropriate

office under Sec. 4.960 and serve your Answer on all parties to the

appeal.

Section 4.943 Who May File an Amicus Brief?

This section would explain that any person may file an Amicus Brief

with the appropriate office under Sec. 4.960 within 60 days after the

date the Statement of Reasons or Intervention Brief is filed with the

IBLA or Assistant Secretary. You would have to serve your

[[Page 1947]]

Amicus Brief on all parties to the appeal.

Section 4.944 May Parties File Additional Responsive Pleadings?

Under current IBLA practice, the IBLA can consider responsive

pleadings after an Answer is filed. See 43 CFR 4.414. Thus, as

proposed, this section would provide that if you filed a Statement of

Reasons or an Intervention Brief, and another person files an Answer or

an Amicus Brief, you could file a Reply to the Answer or a Response to

the Amicus Brief within 30 days after the date the Answer or Amicus

Brief was served upon you. In addition, if you filed an Answer and

another person filed a Reply or an Amicus Brief, you could file a

Surreply to that Reply to address new arguments or authorities raised

in the Reply, or a Response to the Amicus Brief, within 20 days after

the Reply or Response is served upon you. You would have to serve any

responsive pleadings under this section on all parties to the appeal.

The IBLA retains the right to limit the length of pleadings or the

number of pleadings beyond those specifically provided in this rule.

Section 4.945 May I Ask for a Hearing by an Administrative Law Judge?

This section would provide a way for the IBLA, at the request of

any party, to seek additional facts or arguments that the party

believes are necessary to help decide the appeal.

Any party could request in writing that the IBLA refer a matter to

an Administrative Law Judge of the Hearings Division under 43 CFR 4.415

for an evidentiary hearing if there are disputed issues of material

fact which could affect the decision on the appeal. The party's request

would have to specify the issues of fact that are in dispute. See,

e.g., W.J. and Betty Lo Wells, 122 IBLA 250, 252 (1992), in which IBLA

required that a party requesting a hearing in a case involving a BLM

land exchange explain what issues of material fact require a hearing.

In addition, appellants who request a hearing under this paragraph

would have to agree in writing to extend the period under Sec. 4.958 by

the additional amount of time necessary for the Hearings Division to

complete any action with respect to the referral request, including any

of the actions authorized under paragraph (c)(3). Thus, up to no later

than 30 days after all responsive pleadings are filed under Sec. 4.944,

parties could, at any time during the appeals process, including record

development, request that disputed issues of material fact be resolved

by an Administrative Law Judge. Parties could not, however, require

other parties to produce documents.

Paragraph (c) would provide that if the IBLA grants a party's

request, the IBLA could issue an order:

(1) Authorizing the Administrative Law Judge to specify additional

issues;

(2) Authorizing the parties to add additional relevant issues, with

the approval of the Administrative Law Judge; and

(3) Asking the Administrative Law Judge to issue:

(i) Proposed findings of fact;

(ii) A recommended decision that includes findings of fact and

conclusions of law; or

(iii) A decision that would be final for the Department absent an

appeal to IBLA.

Section 4.946 May IBLA Require Additional Evidence or Arguments From

Parties?

Paragraph (a) would provide that the IBLA may require additional

evidence or written arguments from parties by issuing an order:

(1) Requiring any party or all parties to the appeal to produce

additional evidence or written arguments or both. Thus, unlike parties,

the IBLA has authority to require parties to produce additional

information;

(2) Requiring the parties to appear before the IBLA for oral

argument; or

(3) Referring the matter to an Administrative Law Judge of the

Hearings Division under 43 CFR 4.415 for an evidentiary hearing if

there are disputed issues of material fact which could affect the

decision on the appeal.

Under paragraph (b), the IBLA's referral under paragraph (a)(3):

(1) Would have to specify the issues of fact upon which the hearing

is to be held;

(2) Could authorize the Administrative Law Judge to specify

additional issues;

(3) May authorize the parties to add additional relevant issues,

with the approval of the Administrative Law Judge; or

(4) Could request that the Administrative Law Judge issue:

(i) Proposed findings of fact;

(ii) A recommended decision that includes findings of fact and

conclusions of law; or

(iii) A decision that would be final for the Department absent an

appeal to IBLA.

Paragraph (c) would provide that failure of any party to comply

with an IBLA order issued under this section may result in any

contested fact being found against the party who does not comply.

Section 4.947 May IBLA Establish Deadlines for Matters Referred to

Administrative Law Judges?

This section would provide that the IBLA may establish appropriate

deadlines for any matter referred to an Administrative Law Judge under

Secs. 4.945 or 4.946.

Section 4.948 When Will the IBLA Decide My Appeal?

This section would provide in paragraph (a) that the IBLA would

decide your appeal by the date the appeal ends under Sec. 4.912.

Paragraph (b) would state that the IBLA will serve its decision on

all parties to the appeal, and other persons as required under

Sec. 4.963.

Paragraph (c) would provide that, if an Assistant Secretary will

decide your appeal under Sec. 4.937, the Assistant Secretary would

decide your appeal on or before the day your appeal ends under

Sec. 4.912. The Assistant Secretary would serve that decision on all

parties to the appeal and other persons as required under Sec. 4.963.

Section 4.949 When is an IBLA or an Assistant Secretary's Decision

Effective?

This section would explain that an IBLA or an Assistant Secretary's

decision is effective on the date it is issued, unless the IBLA or the

Assistant Secretary provides otherwise. The decision would be the final

action of the Department.

Section 4.950 What if IBLA Requires MMS or a Delegated State to

Recalculate Royalties or Other Payments?

The purpose of this section is to provide a mechanism for MMS to

correct calculations for orders within the 33-month time period in

which to decide appeals concerning Federal oil and gas leases subject

to RSFA when IBLA directs MMS to recalculate. Thus, we are proposing

this section in order to avoid the need for remands, which could be too

time consuming to take place within the RSFA 33-month period. Moreover,

we were concerned that if cases were remanded, appellants or

intervenors would argue that the order responding to the remand might

not be timely under the 7-year RSFA statute of limitations applicable

to Federal oil and gas leases under RSFA, Sec. 4(a), adding FOGRMA

Sec. 115(b), 30 U.S.C. 1724(b). To deal with these concerns, we decided

instead to devise a system to make factual adjustments that would be

final for the Department and not subject to administrative appeal when

IBLA orders such adjustments.

Under paragraph (a), because Indian leases and Federal leases other

than oil

[[Page 1948]]

and gas are not subject to RSFA, the time limits and finality

requirements in this section would not apply.

Paragraph (b) would provide that an IBLA decision modifying an

order and requiring MMS or a delegated State to recalculate royalties

or other payments, would be the final decision in the administrative

proceeding for purposes of the 33-month period under 30 U.S.C. 1724(h).

Thus, the IBLA decision on the merits would not be administratively

appealable, even if it ordered MMS to perform additional calculations.

Under paragraph (c), after MMS or the delegated State that

performed the audit received an IBLA order to recalculate, it would be

required to provide to IBLA, and all parties served with IBLA's

decision, any recalculation IBLA requires under paragraph (b) within 60

days of its receipt of IBLA's decision. We chose 60 days because if

IBLA issues its decision within the 30-month goal provided under

Sec. 4.948, MMS or the delegated State that performed the audit would

have 60 days to perform the recalculation, and IBLA would have

approximately 30 days to review the recalculation before the running of

the 33-month period under RSFA. There would be no further appeal within

the Department from MMS's or the delegated State's recalculation under

paragraph (c). Accordingly, the decision IBLA issues under paragraph

(b), together with MMS's or the delegated State's recalculation under

paragraph (c), would constitute the final action of the Department that

is judicially reviewable under 5 U.S.C. 704. In other words, appellants

and intervenors could not appeal the recalculation administratively,

nor object to it before IBLA between the time IBLA receives the

recalculation and the running of the 33-month period under RSFA.

Section 4.951 May a Party ask IBLA to Reconsider its Decision?

If you were a party, you could submit a request in writing to IBLA

that it reconsider its decision within 30 days of the date you receive

the decision. The party requesting reconsideration would have to

specifically explain to IBLA in its request what it believes the

extraordinary circumstances are that require reconsideration.

Like 43 CFR 4.403, paragraph (b) would provide that filing a

request for reconsideration would not suspend the effectiveness of

IBLA's decision. The purpose of maintaining the effectiveness of IBLA's

decision is to assure that IBLA's decision would be deemed the final

decision for the Department under the default rule of decision in

Sec. 4.956.

Paragraph (c) would provide that a request for reconsideration is

not necessary to exhaust administrative remedies.

Section 4.952 Under What Circumstances May IBLA Reconsider its

Decision?

The purpose of this section is to establish IBLA standards for

reconsideration of appeals subject to this subpart. The standards IBLA

would use to determine whether to reconsider a decision under this

proposed section would continue IBLA's practice of only reconsidering

its decisions ``in extraordinary circumstances.'' See 43 CFR 4.403. In

addition, unlike the current provision in 43 CFR 4.403 that provides

that there must be a ``sufficient reason'' for reconsideration, the

proposed rule would specifically state that the following reasons could

be sufficient for reconsideration:

(a) Discovery of evidence not before IBLA at the time the decision

was issued which demonstrates error in that decision. Accordingly, a

request for reconsideration would have to explain why such evidence was

not previously available or provided to IBLA;

(b) IBLA's misinterpretation of material facts;

(c) Clear error of law;

(d) Recent judicial development;

(e) Change in Departmental policy; or

(f) Inconsistent agency decisions.

These reasons codify IBLA practice.

Section 4.953 May Other Parties to the Appeal Respond to a Request for

Reconsideration?

The purpose of this section is to provide parties with an

opportunity to respond to requests for reconsideration. Thus, you could

answer a request for reconsideration within 15 days of your receipt of

a copy of the request. We believe that 15 days within which to respond

to a request for reconsideration is sufficient because the standards

for reconsideration under Sec. 4.952 should narrow the scope of

requests, and, likewise, any response. You would have to serve your

answer to a request for reconsideration on all parties to the appeal.

Section 4.954 On Whom Will IBLA Serve a Decision on Reconsideration?

This section would provide that IBLA will serve its decision on all

parties to the appeal, and other persons as required under Sec. 4.963.

Section 4.955 May the Secretary of the Interior or the Director of OHA

Take Jurisdiction of an Appeal or Review a Decision?

This section would state that the Secretary or the Director of OHA

may take jurisdiction of an appeal or review a decision issued under

this subpart.

Section 4.956 What if the Department Does Not Issue a Decision by the

Date My Appeal Ends?

This section of the rule is one the Department hopes it will never

use. Our intent was to draft a rule that will allow us to decide

appeals within the 33-month period RSFA mandates and avoid the

necessity of this section. RSFA states that:

The Secretary shall issue a final decision in any administrative

proceeding, including any administrative proceeding pending on the

date of enactment of this section, within 33 months from the date

such proceeding was commenced or 33 months from the date of such

enactment, whichever is later

* * * * *

RSFA Sec. 4(a), adding new FOGRMA Sec. 115(h)(1), 30 U.S.C. 1724(h)(1).

RSFA also tells us what happens if the Secretary does not issue a

decision within 33 months in appeals involving monetary or nonmonetary

``obligations.'' In such instances, under 30 U.S.C. 1724(h)(2):

(A) the Secretary shall be deemed to have issued and granted a

decision in favor of the appellant as to any nonmonetary obligation

and any monetary obligation the principal amount of which is less

than $10,000; and

(B) the Secretary shall be deemed to have issued a final

decision in favor of the Secretary, which decision shall be deemed

to affirm those issues for which the agency rendered a decision

prior to the end of such period, as to any monetary obligation the

principal amount of which is $10,000 or more, and the appellant

shall have a right to judicial review of such deemed final decision

in accordance with title 5 of the United States Code.

In paragraph (a), the Department makes clear that this section

would apply only to appeals of orders or portions of orders involving

monetary and nonmonetary obligations under Federal oil and gas leases

filed on or after the date this rule becomes effective. (Proposed

Sec. 4.972 applies to appeals subject to RSFA but filed before the

effective date of this rule.) For Indian leases and Federal mineral

leases other than oil and gas, the time limits in 30 U.S.C. 1724(h) and

the default rule of decision stated in this section would not apply

because those leases are not subject to RSFA. Thus, the default rule of

decision in this section also would not apply to appeals of orders or

portions of orders regarding Federal oil

[[Page 1949]]

and gas leases that do not involve a monetary or nonmonetary

obligation. Accordingly, the default rule of decision would not apply

to appeals of orders related to reporting of production or providing

information under Federal oil and gas leases (e.g., under the authority

for investigations under FOGRMA Sec. 107, 30 U.S.C. 1717) because the

definition of ``obligation'' under RSFA Sec. 2(1), adding FOGRMA

Sec. 3(25), 30 U.S.C. 1702(25), does not include such matters.

In our outreach meetings, representatives of the solid mineral

industry requested that we make appeals involving solid mineral leases

subject to the 33-month deadline under this section. Specifically,

those industry representatives asked the Department to deem solid

mineral appeals denied regardless of dollar amount if the Department

misses the 33-month time frame. However, the Department decided that

the proposed rule would only apply to appeals of orders regarding

monetary and nonmonetary obligations as defined under RSFA. Although we

plan to use the same time frames to process Indian, solid mineral, and

geothermal appeals, we do not plan to impose this section's default

rule of decision on those appeals. We believe that the benefits of

obtaining IBLA review and decisions outweighs industry's desire for a

quick, mandatory decision.

Paragraph (b) would implement the RSFA rule of decision for appeals

for which IBLA, an Assistant Secretary, the Secretary, or the Director

of OHA does not issue a final decision by the date the appeal ends

under Sec. 4.912. In such instances, under 30 U.S.C. 1724(h)(2), the

Secretary's default decision on an appeal would be:

(1) In favor of the appellant for any nonmonetary obligation or any

monetary obligation with a principal amount of less than $10,000;

(2) In favor of the Secretary for any monetary obligation with a

principal amount of $10,000 or more.

Because of the various changes to and dispositions of orders that

may occur during the appeals process, such as MMS Director modification

or rescission, or IBLA reconsideration, the proposed rule would clarify

the application of the RSFA default decision provision in such cases.

In essence, the default decision provisions would only apply to those

aspects of the appeal still under dispute between the appellant and the

Secretary. Thus, paragraph (c) would explain what is deemed decided for

orders which have been modified during the appeals process and which an

appellant has continued to appeal. Basically, the only portion of an

appeal that is subject to the default decision provision is that

portion of the original order that is still in dispute between the

appellant and MMS, not an intervenor and MMS.

Under paragraph (c)(1), if the MMS Director modified an order and

you continued your appeal of the modified order, the decision the

Secretary would be deemed to have made under paragraph (b) would apply

only to those aspects of the modified order that you continued to

contest. Accordingly, those aspects of the Director's modification that

you did not contest would stand, and the Secretary would be deemed to

have affirmed the modifications you did not contest, regardless of the

amount of any monetary obligation, or any nonmonetary obligation, that

you did not contest. For example, assume that you appeal an order

involving two separate monetary obligations, one worth $15,000, and one

worth $20,000. Assume also that MMS agrees with you on the first

monetary issue worth $15,000 and modifies the order accordingly to

decrease that obligation to $8,000. If you do not dispute that

modification, but continue to dispute only the second $20,000 monetary

obligation, and the Department does not issue a final decision within

33 months, then, the default decision provision of this section would

neither affirm the portion of the initial order that was removed by the

MMS Director's modification nor reverse the Director's determination

that you owed $8,000 (a monetary obligation less than $10,000). Rather,

the order as modified with respect to the $8,000 monetary obligation

would stand because there is no longer an administrative proceeding

pending with respect to that obligation. In addition, the $20,000

disputed portion of the order would be deemed decided in favor of the

Secretary under paragraph (b).

Under paragraph (c)(2), if the MMS Director modified an order and a

delegated State intervened in the appeal, and if neither the recipient

of the order or Notice of Order nor a joining lessee has continued the

appeal, the decision the Secretary would be deemed to have made under

paragraph (b) would be to affirm the order as modified by the MMS

Director regardless of the amount of any monetary obligation, or any

nonmonetary obligation, at issue in the lessee's or designee's appeal.

For example, assume that you appeal an order involving two separate

monetary obligations, one worth $15,000, and one worth $20,000. Assume

also that MMS agrees with the you on the first monetary issue worth

$15,000 and modifies the order accordingly to decrease that obligation

to $8,000, and that a delegated State intervenes to dispute the

modification of the first issue. If you do not dispute that

modification but continue to dispute only the second $20,000 monetary

obligation, and the Department does not issue a final decision within

33 months, then the order as modified with respect to the $8,000 at

issue would stand because there is no longer an administrative

proceeding pending with respect to that obligation. Thus, even though

the delegated State intervened to contest the modification, the

Secretary will be deemed to have affirmed the Director's determination,

even though the amount is less than $10,000, because the State is not

an appellant. In addition, the disputed portion of the order would be

deemed decided in favor of the Secretary under paragraph (b) because

the appellant continued to contest that aspect of the order and the

amount of the obligation was over $10,000.

Under paragraph (d), if the MMS Director rescinded an order and a

delegated State intervened in the appeal, the Secretary would be deemed

to have affirmed the MMS Director's rescission in all respects.

Although the intervening State disputes the Director's rescission, the

original order is no longer in dispute between the Secretary and the

appellant--it is in dispute between the Secretary and the delegated

State. Therefore, the rescission would be affirmed because the

intervening State is not an appellant. We do not believe that Congress

intended 30 U.S.C. 1724(h)(2) to operate to reinstate orders the

Director had rescinded.

Paragraph (e) would explain the relationship of requests for

reconsideration to the default decision provision. If the IBLA issues a

decision on or before the date the appeal ends under Sec. 4.912, that

decision is the final decision in the administrative proceeding for

purposes of 30 U.S.C. 1724(h)(1) and fulfills the requirements of that

provision. Thereafter, 30 U.S.C. 1724(h)(1) and (2) have no further

application. Section 1724(h)(2) would not apply because the IBLA has

already issued a final decision for the Department. Requests for

reconsideration do not change the fact that the Department has issued a

final decision in the administrative proceeding. IBLA decisions are

final for the Department and therefore meet the RSFA 1724(h) standard.

Therefore, if a party requests reconsideration of an IBLA decision,

the RSFA provision at 30 U.S.C. 1724(h) does not compel the IBLA to

issue a

[[Page 1950]]

further decision within the section 1724(h)(1) time frame. Beyond the

text of the statute itself, there are several additional reasons why

this is so.

First, when the IBLA issues a decision, that decision constitutes

final agency action under the Administrative Procedure Act, 5 U.S.C.

704, and the lessee may seek judicial review. If the lessee chooses to

seek reconsideration rather than sue for judicial review, it is

invoking a purely optional additional procedure within the Department

and can have no objection to the IBLA taking the time necessary to rule

on the request for reconsideration.

Second, the obvious intent of 30 U.S.C. 1724 (h) is to ensure that

the Department issues a judicially reviewable final agency action

within the prescribed time frame. When the IBLA issues a decision, it

has accomplished that objective and met the statutory purpose.

Third, 30 U.S.C. 1724(h) was not intended to provide lessees a tool

to try to thwart IBLA decisions that they don't like that involve

principal amounts of less than $10,000 by filing requests for

reconsideration. If the IBLA were compelled to issue a second decision

within the section 1724(h)(1) time frame, it would leave the IBLA with

very little time to act before the section 1724(h)(2) rule of decision

automatically reversed the first decision.

Paragraph (f) would provide that if the principal amount of a

monetary obligation is not specifically stated in an order and must be

computed to comply with the order, the principal amount referred to in

paragraph (b) means the principal amount the MMS estimates you would be

required to pay as a result of the order. Thus, if MMS issued an order

to perform a restructured accounting, MMS could provide an estimate of

the principal amount of the monetary obligation for purposes of this

section. This estimate normally would be made at the time of the order

and included in the order, but it might be done, or revised, later, as

more information becomes available during the appeals process,

particularly during record development. See proposed 30 CFR 242.105.

Section 4.957 What is the Administrative Record for My Appeal if it is

Deemed Decided?

This section would explain that if your appeal is deemed decided

under Secs. 4.956 or 4.972, regardless of what the deemed decision is

under those sections, the record for your appeal is the record

established under Secs. 4.919 or 4.920, or before the MMS Director in

an appeal under former 30 CFR part 290, plus any additional

correspondence to the MMS Director, the MMS Director's notice of

concurrence, modification, or rescission under Sec. 4.929(d), or MMS

Director's decision under 30 CFR part 290, any pleadings to the IBLA,

and any IBLA orders and decisions.

For example, assume that the MMS Director modified your order, and

you continued your appeal to the IBLA by filing a Statement of Reasons.

Assume also that MMS files an Answer. If the IBLA did not issue a

decision in your appeal by the end of the RSFA 33-month period, and the

MMS Director's modification is deemed decided in the Department's favor

under Sec. 4.956, the record would include not only the record

developed under Secs. 4.919 and 4.920, but also any additional

correspondence to the MMS Director, the MMS Director's notice of

modification, your Statement of Reasons, and MMS's Answer.

Section 4.958 How Do I Request an Extension of Time?

RSFA, Sec. 4(a), adding new FOGRMA Sec. 115(h)(1), 30 U.S.C.

1724(h)(1), allows extensions of the 33-month time period by any amount

``agreed upon in writing by the Secretary and the appellant.'' To

ensure careful tracking of time frames for all appeals, we are

proposing the same procedure regardless of whether RSFA applies to the

appeal. Regardless of who requests the extension, the Department has

sole discretion whether to agree to extensions. However, the time frame

cannot be extended without the agreement of the appellant. Thus, if a

delegated State Intervenor wanted more time to file its Intervention

Brief, the Department could choose not to agree to the extension

because the extension could jeopardize meeting the 33-month time frame.

However, the State could seek approval of the appellant to extend the

33-month time frame.

This section would explain the process for requesting an extension

of time. Parties would be required to follow the procedures in

paragraph (a)(1) whenever they needed: (i) additional time after their

appeal commenced to meet any filing requirement under this subpart;

(ii) additional time for the Department to issue a final decision in

their appeal; (iii) to stay their appeal pending settlement efforts; or

(iv) additional time for any other reasons. Under paragraph (a)(2),

parties would have to submit a written request for an extension of time

to the office or official with whom they must file the document before

the required filing date.

Paragraph (b) would require appellants to agree in writing in their

request to extend the period in which the Department must issue a final

decision in their appeal under Secs. 4.956 or 4.972, or which the

Department uses as guidance to track their appeal under Sec. 4.948, by

the amount of time for which they are requesting an extension.

Under paragraph (c), the Department could require any other party

seeking an extension of time 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 Secs. 4.956 or 4.972, or which the

Department uses as guidance to track the appeal under Sec. 4.948, by

the amount of time for which the other party is requesting an

extension.

Section 4.959 May IBLA Consolidate Appeals?

The current IBLA rules do not provide a process for consolidation.

Thus, consolidation is at the discretion of IBLA. This section would

continue to give IBLA discretion to consolidate appeals when

consolidation would make the process more efficient both for parties

and the Department.

Paragraph (a) would allow IBLA to consolidate appeals that involve

the same order or decision not to issue an order, common issues of

disputed material fact, or common issues of law.

In order to prevent concerns about meeting the 33-month time frame

and encourage consolidation, proposed paragraph (b) would require

appellants that wish to consolidate to extend the 33-month time frame

so that all appeals being consolidated are put on the same track as the

latest of the appeals being consolidated. However, under paragraph

(b)(2)(ii) of this section, the parties and IBLA also could agree to

extend the time frame by a different amount.

Paragraph (c) would provide that IBLA will notify all parties to

the appeal of any consolidations under this section.

Section 4.960 Where Do I File Documents Required Under This Subpart?

This section departs from the current process whereby all documents

at the early stages of the appeals process are filed with the office

that issued the order. However, although you would no longer file your

documents with the office that issued the order, you could be required

to serve that office and other persons under Sec. 4.962.

Accordingly, the substantive sections of the rule would tell you

with whom you would have to file your document, and this section would

provide times

[[Page 1951]]

and addresses. Thus, this section would provide that you must file

documents required under this subpart in the appropriate office as

follows:

(a) With the MMS DRD between 9 a.m. and 5 p.m. local time at:

[address of MMS DRD], using the U.S. Postal Service, a private delivery

or courier service, hand delivery or telefax to (______) ______-______.

(b) With 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)

235-9014; or

(c) With an Assistant Secretary at: [address of MMS DRD], using the

U.S. Postal Service, a private delivery or courier service, hand

delivery or telefax to (______) ______-______.

Currently, the Department does not allow filing by telefax. This

rule would allow filing by telefax. However, under paragraph (d), if

you filed a document by telefax, you would have to send an additional

copy of your document to the same office or official so that it is

received within 5 business days of your telefax transmission using the

U.S. Postal Service, a private delivery or courier service or hand

delivery. The Department added this provision to make filing easier for

parties, but wanted to assure that it had a legible hard copy for the

file. Because timing is critical, and in some instances jurisdictional,

we recommend that parties keep documentation that the proper office

received the telefax transmission.

Section 4.961 How Can a State Concerned Receive Notification of Record

Development and Settlement Conferences?

For many States concerned, the amount of their revenues from

Federal royalties is relatively small, and they therefore do not

actively participate in the collection process. Thus, we are not

proposing to seek the participation of all States concerned in all

record development and settlement conferences that could affect their

revenues. However, those States concerned without delegations that

would like to participate could inform MMS at any time of their

interest, and then MMS would begin notifying them of record development

and settlement conferences. Accordingly, if a State concerned wanted to

receive notification of record development conferences under Sec. 4.917

and settlement conferences under Sec. 4.924, then the State concerned

would have to provide the MMS DRD with the name, title, address, and

telephone number of the State official authorized to receive the

notifications.

Section 4.962 What Copies of Documents Filed Under This Subpart are

Appellants, Lessees, and Intervenors Required to Serve?

This proposal seeks to improve the process of providing appropriate

notification about pending appeals to States, Indian lessors, and all

parties and others interested in particular appeals. The tables

presented in this section and Sec. 4.963 of the proposed rule are an

attempt to provide a user-friendly means for each participant in the

appeals process to determine when and to whom they must serve copies of

documents filed in the appeals process. The requirements for filing the

original documents are contained in the sections of this rule

discussing each of those specific documents.

This section would apply to appellants, lessees, and intervenors--

the requirements for Department of the Interior offices are set out in

Sec. 4.963. Who you must serve would be different depending on who the

appellant is. The table in paragraph (a) would apply to appellants,

lessees, and intervenors participating in appeals filed by recipients

of orders or notices of orders involving leases on Federal or Indian

tribal lands (i.e., appellants other than Indian lessors).

The table in paragraph (b) would show service requirements for

appellants, lessees, and intervenors participating in appeals by

recipients of orders or notices of orders involving leases on Federal

or Indian tribal lands.

Section 4.963 What Copies of Documents Filed Under This Subpart is the

Department Required to Serve?

Who the Department must serve would be different depending on who

the appellant is. The table in paragraph (a) would apply to Department

of the Interior offices participating in appeals filed by recipients of

orders or notices of orders involving leases on Federal or Indian

tribal lands (i.e., appellants other than Indian lessors).

The table in paragraph (b) would show service requirements for

Department of the Interior offices participating in appeals by

recipients of orders or notices of orders involving leases on Federal

or Indian tribal lands.

Paragraph (c) would apply to appeals involving individual Indian

mineral owners' leases (i.e., leases that are not tribal leases),

regardless of who files the appeal.

We do not believe that it is possible or practical to serve copies

of all documents filed on individual Indian mineral owners. Instead,

the proposal is to serve copies on BIA area offices and for those

offices to provide appropriate notification. This could vary depending

on the interest of the individual Indian mineral owner and the relative

importance of the cases, as well as on other factors relevant to the

particular BIA area office and the individual India

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