64 FR 26240 1999-05-13 · 21, 1999). Those attending included representatives of natural gas, oil, and coal producers, including representatives both of large integrated producers

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ThursdayMay 13, 1999

Part X

Department of theInteriorOffice of Hearings and Appeals

Minerals Management Service

30 CFR Parts 208, 241, 242, 243, 250,and 290 and 43 CFR Part 4Appeals of MMS Orders; Final Rule

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26240 Federal Register / Vol. 64, No. 92 / Thursday, May 13, 1999 / Rules and Regulations

DEPARTMENT OF THE INTERIOR

Office of Hearings and Appeals

Minerals Management Service

30 CFR Parts 208, 241, 242, 243, 250,and 290

43 CFR Part 4

RIN 1010–AC21

Appeals of MMS Orders

AGENCIES: Office of Hearings andAppeals (OHA) and MineralsManagement Service (MMS), Interior.ACTION: Final rulemaking.

SUMMARY: OHA and MMS are amendingtheir rules governing the appeal oforders from MMS’s RoyaltyManagement Program and MMS’sOffshore Minerals Management. Thisrule makes final parts of the proposedrule published on January 12, 1999. Therule also: implements certain provisionsof the Federal Oil and Gas RoyaltySimplification and Fairness Act of 1996governing how appellants in royaltyappeals may demonstrate financialsolvency instead of posting a surety, andprovides for new regulations to collectprocessing fees in appeals from OffshoreMinerals Management orders.EFFECTIVE DATES: Effective on May 13,1999, except that the amendedprovisions of 30 CFR parts 208, 241, and243 will be effective June 14, 1999.FOR FURTHER INFORMATION CONTACT:David S. Guzy, Chief, Rules andPublications Staff, telephone (303) 231–3432, FAX (303) 231–3385, [email protected] INFORMATION: The ruleprovides that 30 CFR parts 250 and 290and 43 CFR subpart J will be effectiveimmediately upon publication. Underthe Administrative Procedure Act at 5U.S.C. 553(d), an agency must find goodcause to make a substantive ruleeffective sooner than 30 days after thedate of publication. There are certainadministrative appeals pending beforethe Department in which, under 30U.S.C. 1724(h)(1), the Secretary mustissue a final decision before May 13,1999, which is less than 30 days afterpublication of this rule. (May 13, 1999,is 33 months after the date of enactmentof the Federal Oil and Gas RoyaltySimplification and Fairness Act of 1996,which enacted 30 U.S.C. 1724(h).) Ifthere is no final departmental decisionby that date, 30 U.S.C. 1724(h)(2)imposes a statutory rule of decision inthose cases. Title 43 CFR part 4 subpartJ resolves various issues involved inimplementing the requirements of 30

U.S.C. 1724(h)(1) and (2). Its provisionsapply to those cases in which theSecretary must issue a final decision byMay 13, 1999, and the effect of thestatutory rule of decision if theDepartment does not issue a finaldecision by that deadline. Title 30 CFRparts 250 and 290 contain provisionsregarding appeals of orders that are partof the integrated changes to the ordersand appeals scheme that includes thenew 43 CFR part 4 subpart J. TheDepartment therefore finds that goodcause exists to make these provisionseffective immediately upon publication.The remainder of this rule will beeffective 30 days after publication.

I. BackgroundIn May 1994, MMS began a

comprehensive review of itsadministrative appeals process. As partof that review, MMS held severalinformal meetings with State, tribal, andindustry representatives to discuss theproblems and possible solutionsregarding the appeals process. Theprincipal problems identified includedthe length of the appeals process—sometimes taking several years toresolve a case—and the excessive costsof the process to both MMS andappellants.

In 1995, the Department of theInterior (DOI) established a RoyaltyPolicy Committee (RPC) under theMinerals Management Advisory Board.At its first meeting in September 1995,the RPC established the Appeals andAlternative Dispute Resolution (ADR)Subcommittee. The Appeals and ADRSubcommittee was created to makerecommendations to the RPC to improvethe appeals and ADR processes.Membership in the Appeals and ADRSubcommittee included 11representatives from industry, 5representatives from States, and 2representatives from Indian tribes. TheSubcommittee agreed that the principalpurpose of the MMS administrativeappeals process should be theexpeditious and independent review ofappeals. The RPC made arecommendation (RPC Report) andsubmitted that recommendation to theSecretary of the Interior. The primaryrecommendation was to change thecurrent two-step appeals process into aone-stage Interior Board of LandAppeals (IBLA) administrative appealprocess. On September 22, 1997, theSecretary accepted the RPC report forconsideration and proposal with somechanges and clarifications.

On August 13, 1996, the Presidentsigned into law the Federal Oil and GasRoyalty Simplification and Fairness Actof 1996, Pub. L. 104–185, as corrected

by Pub. L. 104–200 (RSFA). RSFAamended portions of the Federal Oil andGas Royalty Management Act of 1982(FOGRMA), 30 U.S.C. 1701 et seq.Before enactment of RSFA, there was notime limit on when DOI must issuedecisions in appeals of orders involvingroyalty and other payments for Federaloil and gas leases. RSFA added a newFOGRMA section 115(h), 30 U.S.C.1724(h), governing the time frame forDOI to process appeals of MMS ordersor decisions involving royalties andother payments due on Federal oil andgas leases. For appeals involvingFederal oil and gas leases covered bythis new provision, DOI has 33 monthsfrom the date a proceeding iscommenced to complete all levels ofadministrative review. If DOI does notdecide the appeal within 33 months, theappeal is deemed decided either for oragainst DOI, depending on the type oforder and the monetary amount at issuein the appeal. The 33-month deadlinedoes not apply to appeals involvingIndian leases or Federal leases forminerals other than oil and gas.

As a result of the MMS review of theappeals process and RSFA, MMSannounced a proposed rule in theFederal Register on October 28, 1996(61 FR 55607). The proposed regulationprovided for amendments to the MMSappeals process at 30 CFR part 290. OnDecember 31, 1997, MMS announcedthat it intended to withdraw the October28, 1996, proposed rule when itpublished a revised notice of proposedrule (62 FR 68244). Accordingly theOctober 28, 1996, proposed rule waswithdrawn when MMS proposed arevised appeals process on January 12,1999 (64 FR 1930) that included most ofthe RPC Report recommendations.

Two portions of the proposed rulewould have implemented the RPCrecommendations. First, the newproposed 43 CFR part 4, subpart J,would have established a newprocedure for appeals of royalty orders.That section would have replaced thecurrent regulations at 30 CFR part 290and 43 CFR part 4, subpart E, as theyrelate to appeals of royalty ordersinitially to the MMS Director and thento the IBLA. Second, the new proposed30 CFR part 242, subpart B, would haveestablished procedures for orders issuedby MMS and delegated States. Thatsubpart would have incorporatedcertain RSFA provisions regardingorders and orders to performrestructured accounting and for serviceof orders on lessees when orders aresent to their designees. In addition,subpart C of proposed part 242 wouldhave established procedures for Indianlessors to formally request that MMS


26241Federal Register / Vol. 64, No. 92 / Thursday, May 13, 1999 / Rules and Regulations

take actions. Finally, subpart D of part242 would have included the servicerequirements that currently are found at30 CFR part 243.

We have decided not to go forward atthis time with the entire appeals processthat we proposed on January 12, 1999,for two major reasons. One, we receivednumerous negative written and oralcomments regarding the proposedprocess. Two, the necessity to publishbefore May 13, 1999, a final ruleimplementing the RSFA appealsadjudication time requirements and theassociated rule of decision under 30U.S.C. 1724(h) for cases in which thereis no final Departmental decisionprevents us from conducting a thoroughand reasoned review of all thecomments we received on the appealsprocess. One commenter suggested thatwe withdraw the proposed rule, leavethe current process in place, and onlypublish the portions of the proposedrule necessary to implement RSFA.Rather than withdrawing the proposedrule, we are making final only thoseportions of the proposed rulemakingnecessary to implement RSFA, and theportions of the proposed rule whichreceived few, if any, comments. Thoseportions of the rule that are part of thisfinal rulemaking are as follows:

(1) The sections of proposed 43 CFRpart 4, subpart J, necessary toimplement the 33-month time period at30 U.S.C. 1724(h), and allow joinder forlessees who receive notice of an orderissued to their designee as requiredunder 30 U.S.C. 1712(a);

(2) Proposed 30 CFR part 243,regarding stays pending appeal andbonding, and implementing 30 U.S.C.1724(l) which allows lessees todemonstrate financial solvency in lieuof posting a bond or other suretyinstrument pending an administrative orjudicial proceeding;

(3) Proposed 30 CFR part 290regarding appeals of MMS OffshoreMinerals Management Program (OMM)orders and related changes to 30 CFRpart 250;

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

(5) Proposed changes to definitions in30 CFR 208.2 and to 30 CFR 208.16regarding appeals of contracting officers’decisions by purchasers of Federalroyalty oil.

Because we are not finalizing theentire proposed rule, we will continueto require appellants to use the appealsprocedures for royalty orders found at30 CFR part 290 and 43 CFR part 4,subpart E, until we can publish a finalrule on the appeals process. However,for royalty-related appeals to the MMS

Director, the rules are now located at 30CFR part 290, subpart B. That subpart isrevised to contain appropriate headingsand provisions of the proposed rulenecessary to implement RSFA. SubpartA contains the procedures in theproposed rule for OMM appeals.

II. Comments on Proposed RuleThe proposed rulemaking provided a

60-day public comment period whichended March 15, 1999. On February 16,1999, DOI held a public hearing inHouston, Texas, to receive oralcomments on the proposed rule. Thatpublic hearing was announced in theFederal Register (64 FR 3262, January21, 1999). Those attending includedrepresentatives of natural gas, oil, andcoal producers, includingrepresentatives both of large integratedproducers and of smaller independentproducers. Participants in the publichearing had the opportunity to askspecific questions about the proposedrule and to provide comments on theproposed rule.

MMS received written commentsfrom 13 commenters during thecomment period. Two additionalcommenters submitted late comments,which we also accepted and considered.Thus, a total of 15 comments wereaccepted for review. One of thecomments was from the State ofCalifornia, 1 was from a miningassociation, 3 were from oil and gastrade associations, 8 were from industry,1 was from an Administrative LawJudge and Attorney-Advisor, from theDOI Salt Lake City Office of theHearings Division, Office of Hearingsand Appeals, and 1 was from a law firm.

We reviewed and analyzed all of thecomments pertaining to the sections thatare part of this final rulemaking and, insome instances, revised the language ofthe final rule based on these comments.The following is a discussion of thespecific comments we received and ourresponse by section number.

III. Section-by-Section Analysis, 30 CFRPart 208

Comment—We received no commentson the proposed amendments to part208.

Response—Although we received nocomments regarding this part, we madesome minor changes necessary to reflectthat we are not making the entireproposed rule final at this time.

IV. Section-by-Section Analysis, 30 CFRPart 241 Civil Penalties

While the focus of the comments tothis proposed rulemaking concerned theprovisions of 43 CFR part 4, subpart J,several comments were received with

reference to this part. Most of thecomments concern sections of the rulein which no substantive change isproposed—where MMS has simplyattempted to restate in plain languagethe rule under which MMS has operatedfor approximately 15 years. Allcomments received concerning this partwere received from an association of oiland gas producers. Where we receivedmore than one comment, the additionalcomments came from an individual oiland gas producer.

Section 241.50 What Definitions Applyto This Subpart?

Comments—We received twocomments, which noted that theproposed rule has not defined‘‘violation.’’ Specifically they inquiredwhether, for example, when a companyfails to report, is each line that shouldhave been reported a violation or is itone violation for the entire report?

Response—MMS has operated underthe current regulations for 15 yearswithout a regulatory definition ofviolation. Any attempt to define theterm to meet all possible circumstanceswould require an impracticallyexhaustive list. Violations could be anyfailure to comply with statutes, rules,lease terms or orders.

In response to the specific questionasking whether each line would be aseparate violation, MMS has alwaysconsidered that each failure to report, orwrongly reporting a line that is requiredto be reported, is a violation. Forexample, if a company fails to report itsproduction of natural gas, each line forwhich natural gas should have beenreported on the production report is aviolation, and each month and eachlease for which it should have beenreported constitutes an additionalviolation.

Section 241.51 What May MMS Do ifI Violate a Statute, Regulation, Order, orLease Term Relating to a Federal orIndian Oil and Gas Lease?

Comment—One commenter notedthat this section does not provide for theappointment of an agent to receiveservice. It also believes that theDepartment is obligated to allow thisdesignation under 30 U.S.C. 1719(h). Inaddition, the commenter also believesthat the statute only allows notice bypersonal service or registered mail.However, it believes that althoughexpress mail and certified mail are notpermitted, they should be.

Response—We agree that this section,as proposed, does not allow specificallyfor the appointment of an agent toreceive service. However, it proposed touse the proposed provisions of 30 CFR



242.304 and 242.305, which provide forservice to designated persons. Forviolations concerning a royalty report(Form MMS–2014), MMS will send thenotice to the individual named by thelessee, designee, reporter or payor as theperson to whom to directcorrespondence. A similar provisionwas included for violations concerningproduction reports and audits. Theproposed rule did not provide fordesignations of persons to be servedwith notices of violations committed bypayors or designees of which the lesseereceives notice. MMS has nottraditionally sent notices ofnoncompliance to lessees that are notacting as reporters, designees or payors.For this reason, we did not consider thispossibility when proposing these rules.We have now added provisions tosection 241.51 clearly allowing thedesignation of an agent for the receipt ofnotices of noncompliance and civilpenalty notices.

We also agree that we are limited inhow we may serve notices under 30U.S.C. 1719(h). While we also agree thatwe should be able to use other forms ofservice, we have clarified that servicemust be by registered mail or personalservice, both in this section and insection 241.61.

Section 241.52 What If I Correct theViolation?

Comment—One comment wasreceived, to the effect that this sectionconflicts with section 241.54, byimplying that no review was possible inthe case of a company that has compliedwith a notice of noncompliance withinthe statutory 20-day period to correctthe violation.

Response—We believe that thelanguage in proposed section 241.54that allowed review ‘‘regardless ofwhether you correct the violations,’’clearly means that a party may seek ahearing on the record even if itcomplied with requirements stated in anotice of noncompliance. However, wehave no record of any past case inwhich a violator corrected a violationand then requested a hearing.

Section 241.53 What If I Do NotCorrect the Violation?

Section 241.54 How May I Request aHearing on the Record on a Notice ofNoncompliance?

Section 241.55 Does My Request for aHearing on the Record Affect thePenalties?

Comments—We received twocomments concerning these sections.These commenters believed that the ruleshould provide for: (1) a longer than 20-

day period for the recipient of a noticeto file its request for a hearing(preferably 40 days); (2) a separateopportunity for a hearing, even if norequest for a hearing is made from thenotice of noncompliance; (3) amechanism for expedited review whenthere is a request for a stay to allowsubstantive review without the risk ofincurring penalties; and (4) morespecific regulatory criteria fordetermining the amount of penalties.The commenters reasoned that thepurposes of 30 U.S.C. 1719, as well asall of FOGRMA, are to encouragevoluntary compliance, and imply thatthe rule, as proposed, violates dueprocess.

Response—Starting with how wedetermine the amount of penalties, wedo not believe that it is necessary toprovide the detailed standards forsetting penalty amounts in regulatoryform. MMS has written guidelineswhich set out, in ranges, appropriatepenalties for a variety of circumstances.We do not believe it is possible to setout all the standards in advance in apermanent fashion by rule. FOGRMArequires only that ‘‘In determining theamount of such penalty, or whether itshould be remitted or reduced, and inwhat amount, the Secretary shall stateon the record the reasons for hisdeterminations.’’ 30 U.S.C. 1719(i). Thissubsection neither requires, nor implies,that the determination be made throughregulation, which would limit theflexibility of DOI in setting penaltyamounts appropriate to the wide varietyof possible circumstances that should beconsidered. However, to assist potentialrecipients of notices of noncompliance,the following table shows the currentnon-binding guidelines MMS uses:

Violation

Company size

Minor Mod-erate Major

Failure to re-port .............. $0–10 $0–25 $5–500

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

vide informa-tion .............. 0–100 2–200 20–500

Failure to com-ply with orderto performrestructuredaccounting ... 0–15 2–35 10–500

Note: Amounts in Dollars per violation permonth.

We also believe that the currentregulations of the Hearings Division ofthe Office of Hearings and Appeals at 43CFR 4.21 have proven more thanadequate when an appellant petitions

for a stay. We have used theseprocedures for 15 years without anycomplaints about an appellant’sinability to have its petition timely andfairly reviewed by the HearingsDivision. We therefore will not changethe procedures to mandate a fasterreview of requests for stays of accrual ofpenalties.

As to the commenter’s first tworequests, FOGRMA grants the Secretarythe discretion to set the time limits foran appellant to request a hearing. MMShas operated under rules requiringhearings to be requested within 20 daysof the date of receipt of the notice ofnoncompliance for more than 15 yearswithout complaint. In spite of thishistory, in the interests of increasing aviolator’s ability to request hearings, wehave changed the proposed rule to allow30 days from the date of receipt of thenotice of noncompliance for anappellant to request a hearing on therecord. MMS has a long history of usinga 30-day period in other contexts(specifically for appeals from MMSorders), which allows ample time forappellants to decide whether to seekreview in those cases.

We agree with the comment that theviolator may still have need for redressconcerning the amount of a civil penaltyeven though that violator did notcontest the notice of noncompliance.We therefore have added new sections241.56 and 241.64 that allow a violator,who did not request a hearing on therecord on a notice on noncompliance,10 days from the receipt of the Noticeof Civil Penalty to request a hearing onthe record limited to the issue of theamount of the penalty only. By notrequesting a hearing on the record onthe notice of noncompliance, therecipient waived the right to contest theunderlying liability for penalties.

Section 241.60 May I Be Subject toPenalties Without Prior Notice and anOpportunity to Correct?

Section 241.61 How Will MMS InformMe of Violations Without a Period ToCorrect?

Section 241.62 How May I Request aHearing on the Record on a Notice ofNoncompliance Regarding ViolationsWithout a Period To Correct?

Section 241.63 Does My Request for aHearing on the Record Affect thePenalties?

Comments—We received one set ofcomments that addressed these sectionsconcerning penalties that may beginwithout a period to correct. The firstissue involves the definition ofviolation. The commenter referred toFOGRMA, which provides for an



assessment of $25,000 per day for eachday such violation continues. Thecommenter believes that MMS has beeninconsistent by specifying a penaltycalculated at $25,000 per day for eachviolation. The second issue is similar tothe comments on sections 241.52through 241.54 in that no separate rightof review is granted as to the amount ofthe penalty and that the time to seekreview is too short.

We also received one comment thataddressed a statement in the preamblethat MMS believes that the statutoryprovision for assessing penalties for‘‘failure to permit entry, inspection oraudit’’ applies to failure to provideMMS with documents that MMS hasrequested under authority of FOGRMA,the regulations or the leases. Thecommenter noted that MMS has arguedin court that audit requests arevoluntary and, for that reason, that theyare not appealable agency actions. Thecommenter continued by saying thatargument is inconsistent with makinglessees subject to FOGRMA penaltieswithout opportunity to correct for notcomplying with audit requests.

Response—As we explained in theresponse to comments on section241.50, we believe MMS has been veryclear over the past decade and one-halfthat each failure to comply with themandates of law is a separate violation.We believe that while FOGRMA usesthe word ‘‘such’’ rather than ‘‘each,’’their meaning is identical in the contextof this regulation. ‘‘Such is ademonstrative word used to indicate thequality or quantity of a thing * * *.’’ Thedefinition of ‘‘each’’ is ‘‘Every(individual of a number) regarded ortreated separately.’’ The CompactEdition of the Oxford English Dictionary823 Vol I and 3136, Vol. II (1971). Inboth cases the word signifies a quantity.In the context of FOGRMA, there is aseparate violation, and thus a separatepenalizable act with a separatelyaccruing penalty, for each suchviolation. The regulation’s meaning isidentical to the statute’s meaning.

As to the potential problem with aperson wanting to appeal only theamount of the penalty, we have addeda provision at section 241.64 allowing ahearing on that issue alone, parallelingthe new section 241.56.

We continue to believe there arecircumstances where a refusal toprovide MMS, or a delegated State, or aTribe operating under a cooperativeagreement (or under a self-determination contract or compact),with documents during an audit wouldamount to a failure to permit lawfulaudit. The exact circumstances underwhich MMS may use this provision will

be addressed in future proceedingswhen MMS believes an appropriate casehas arisen.

Section 241.70 How Does MMS DecideWhat the Amount of the Penalty ShouldBe?

Comment—One comment wasreceived that complained that thecriteria articulated for determining thequantum of civil penalty are inadequate.The commenter demanded that morespecific criteria be articulated to providea reviewing officer and a court moreobjective criteria for determining theexercise of the agency’s authority.

Response—MMS has operated underprovisions similar to these for 15 yearswithout complaint. NeitherAdministrative Law Judges, the InteriorBoard of Land Appeals, nor the Federalcourts found any need for guidance inthe form of a regulation. Indeed,FOGRMA only requires ‘‘In determiningthe amount of such penalty, or whetherit should be remitted or reduced, and inwhat amount, the Secretary shall stateon the record the reasons for hisdeterminations.’’ 30 U.S.C. 1719(i). Asmentioned in the response to sections241.53, 241.54 and 241.55, we intend tocontinue to articulate our reasons aspart of the administrative record ratherthan attempting to do so in a rule.

Section 241.74 May I Seek JudicialReview of the Decision of the InteriorBoard of Land Appeals?

Comment—One comment wasreceived to the effect that the regulationshould include the 30 U.S.C. 1719(j)requirement that judicial review mustbe taken in the United States DistrictCourt for the judicial district in whichthe violation allegedly took place.

Response—We do not have the abilityto determine jurisdiction or venue, orother rules concerning review byFederal courts. We have thereforesimplified the regulation by making it amere pointer to the proper section of theUnited States Code. We have retainedthe sentence informing the reader of thetime limit to make it easier for readersof these regulations to comply withinthe statutory time limit.

Section 241.75 When Must I Pay thePenalty?

Comment—One comment wasreceived repeating the request forseparate review of the amount of thepenalty.

Response—As mentioned above, wehave added provisions allowing forhearings on the record limited to theamount of penalty assessed. Therefore,the paragraph within this section as

proposed that prohibited such reviewshas been removed.

Section 241.77 How May MMS Collectthe Penalty?

Comment—One comment wasreceived that complained that MMS hasno statutory authority under FOGRMAfor execution against a lease surety or tooffset amounts the United States owes tothe violator.

Response—FOGRMA specificallyprovides for offset: ‘‘The amount of anypenalty under this section, as finallydetermined may be deducted from anysums owing by the United States to theperson charged.’’ 30 U.S.C. 1719(f).There is no specific statutory authorityregarding collecting against leasesureties. They fall under the plenaryregulatory authority of the Secretaryunder the mineral leasing laws. Thisregulation is sufficient authority underthose provisions.

V. Section-by-Section Analysis, 30 CFRPart 242

We have decided not to finalize part242 as proposed on January 12, 1999, atthis time. However, we have reservedthis part for future publication.

VI. Section-by-Section Analysis for 30CFR Part 243 Suspensions PendingAppeal and Bonding—RoyaltyManagement

General comments—We received twosets of comments that addressed thisrule, one from an oil and gas producerand one from an association of oil andgas companies. The producer’scomments were favorable to theproposed rule and referred to theassociation’s comments for specificsuggestions.

The association also welcomed theproposed rule and MMS’s proposal toapply the rules even to situations wherethey are not mandated by RSFA, such asproduction from periods prior toSeptember 1996 and to leases forminerals other than oil and gas. Thecommenter also responded to thequestion about whether the rules shouldapply to Indian leases as well as toFederal leases. That commenter statedthat it believed that the rules shouldapply to all appeals, because Indianlessors as well as the FederalGovernment would be protected by thefinancial solvency provisions.

Response—We appreciate thefavorable comments on the proposal.Upon considering the comment that thefinancial solvency provisions of theproposed rule should apply to Indian aswell as Federal leases, we have decidedthat there are important reasons forhaving different sets of rules for Indian



and Federal leases. First, Indian lessorsare not in a comparable position to theUnited States in their ability to absorbthe risk of default by a person believedto be financially solvent but who laterdefaults on an appealed obligation.Indian lessors are much smaller, lessdiversified in their portfolio of risksthan the United States, and are in asignificantly less advantageous positionthan the United States. Second, thestandards that we apply, and mustapply, to Indian leases are different fromthose applied to Federal leases. We havea trust responsibility to Indian lessorsand believe that requiring the protectionof sureties for appeals of obligations onIndian leases is appropriate. Finally,Congress declined to extend the benefitof self-bonding by demonstration offinancial solvency to lessees on Indianlands. For these reasons, we will keepthe separation between Indian andFederal leases as it was in the proposedrule.

Section 243.3 What Definitions Applyto This Part?

Section 243.4 How Do I SuspendCompliance With an Order?

Comment—One commenter requestedthat definitions follow the RSFAdefinitions. In particular, ‘‘order’’ doesnot appear to include anything otherthan orders to pay monetary obligations.Therefore the rules seem only to permitthe suspension of these orders.

Response—The purpose of the use ofthe word ‘‘order’’ in this part is to referto the proper parts under which anappeal may be taken for whichcompliance may be suspended underthis part. To avoid confusion we havedeleted the reference to monetaryobligation. We have clarified section243.4 to provide that appeals of ordersthat do not require the making of apayment may be suspended withoutposting a surety or demonstratingfinancial solvency.

Section 243.5 May Another PersonPost a Bond or Other Surety Instrumentor Demonstrate Financial Solvency onMy Behalf?

Comment—One commenterresponded to our request for commentson whether any limitations are neededon who may post surety or demonstratefinancial solvency on behalf of anappellant. That commenter does notbelieve any limitations are appropriate.

Response—We appreciate thecomment, and we believe that thephrase ‘‘any other person’’ clearlyplaces no limitation on who may postsurety or demonstrate financial solvency

on a lessee’s behalf. Therefore, we havedecided to leave the rule as proposed.

Section 243.6 When Must I or AnotherPerson Meet the Bonding or FinancialSolvency Requirements Under ThisPart?

Comment—One commenter believesthis section should be amended to makeit clear that only one bond ordemonstration of financial solvency isrequired for any particular liability. Thecommenter does not believe MMSshould require sureties from a lesseeand its designee for the same liability.While the commenter believes, from ourexplanation in the preamble to theproposed rule, that only one guaranteeis intended, it believes the rule itselfshould make clear that either the lesseeor the designee, but not both, is requiredto post surety or demonstrate financialsolvency.

Response—We have inserted the wordeither in this section to clarify that onlyone surety is required, regardless of theidentity of the person or persons postingthe surety or sureties.

Section 243.8 When Will MMSSuspend My Obligation To Comply Withan Order?

Comment—One commenterapplauded MMS’s proposal to increasethe minimum amount under appeal forwhich no bond or demonstration offinancial solvency is required. It urgedthat the same rules apply to appealswith respect to Federal and Indianlands.

Response—As explained above, webelieve it is appropriate to havedifferent standards with respect toFederal and Indian lands, and wedecline to change the standards here.

Section 243.10 When Will MMSInitiate Collection Actions Against aBond or Other Surety Instrument or aPerson Demonstrating FinancialSolvency?

Comment—One commenter notedthat the time period for MMS to initiatecollection actions against the bond orother surety is inconsistent with theMineral Leasing Act, 30 U.S.C. 226–2,which allows 90 days for an appellantto seek judicial review of an adversedecision by the Department. Theproposed rule, by contrast, allowedMMS to call on the surety within 30days of such an adverse decision.

Response—We agree that theproposed rule should track the timeperiod in the Mineral Leasing Act withrespect to oil and gas leases for cases inwhich there is a decision of the IBLA oran Assistant Secretary that is subject tojudicial review. We therefore have

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

Section 243.11 May I Appeal the MMSBond-Approving Officer’sDetermination of My Surety Amount orFinancial Solvency?

Comment—One commenter notedthat it did not object to the proposal thatthere would be no administrative reviewof determinations of the Bond-Approving Officer, but requested thatwe clarify that the determinations arejudicially reviewable.

Response—Whether a court wouldhave jurisdiction to review thesedeterminations is a matter of statuterather than regulation. Therefore, we arenot amending the rule to specificallyprovide for judicial review.

Section 243.12 May I Substitute aDemonstration of Financial Solvency fora Bond Posted Before the Effective Dateof this Rule?

Comment—One commenter urgedthat this section be amended to allow anappellant to replace a surety with a self-bond at any time, not just ‘‘when thesurety instrument is due for renewal.’’The commenter’s reason was that anappellant may have many bonds due forrenewal at different times. ‘‘Dependingon the circumstances, it may be moreadministratively convenient * * * toreplace all of its bonds with ademonstration of financial solvency atthe same time.’’

Response—It was not our intent toprevent an appellant from choosingbetween replacing its suretiesindividually as they expire, or replacingall sureties at once. To avoid confusion,we have amended this section to allowreplacement of sureties atadministratively convenient times.

Section 243.200 How Do I DemonstrateFinancial Solvency?

Comment—One commenter notedthat the proposed rule appearsinconsistent with the preamble. Thepreamble noted that MMS could requireupdated financial statements to monitordemonstrations of financial solvency ifthe demonstrator files for bankruptcy.The regulatory language allows MMS torequire updated financial statementsupon request. The commenter urgedMMS to specify the circumstances,other than bankruptcy filings, that mightjustify an appellant to redemonstratefinancial solvency.

Response—We did not intend tonarrow the rule by the preamble. Thebroader requirements of the rule willremain unchanged. We expect MMS tovery rarely request an updated financialstatement, but we believe the flexibility



is needed for circumstances that wecannot currently foresee.

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

Comment—No comments werereceived on the proposed amendmentsto part 250.

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

Subpart A—Offshore MineralsManagement Appeals Procedures

Section 290.2 Who May Appeal?

Comment—One commenter asked ifan appeal from an order issued by anMMS Offshore Minerals Management(OMM) official would be appealableunder the new 43 CFR part 4 subpart J,which is designed for appeals fromorders issued by MMS RoyaltyManagement Program (RMP) officials.Another commenter asked if we coulddo away with the exclusions listed insection 290.2.

Response—An order issued by anMMS OMM official is not appealableunder the new 43 CFR part 4 subpart J.To clarify this matter, section 290.2 willspecify that your appeal to IBLA isunder 43 CFR part 4 subpart E. Addingthe reference to subpart E is consistentwith section 290.8(a) and should clarifythe fact that appeals from orders issuedby MMS OMM officials are appealed toIBLA under 43 CFR part 4 subpart E.The RSFA rule of decision provisionsmade final in 43 CFR part 4 subpart Jdo not apply to appeals of OMM orders.

Also, because we are not publishing afinal rule on a new royalty appealsprocess at this time, we are dividingpart 290 into two subparts to distinguishbetween appeals from orders issuedfrom MMS’s RMP and orders issuedfrom MMS’s OMM Program. Appeals ofOMM orders will be under the rule at30 CFR part 290 subpart A. Appeals ofRMP orders will be under 30 CFR part290 subpart B.

As for doing away with the exclusionslisted in section 290.2, the exceptionslisted for decisions concerning leasebids and deep water fielddeterminations are based on currentrequirements in other sections of ourrules (the sections were referenced inthe proposed rule). The changesproposed to the current OMM appealsprocess were aimed at streamlining andsimplifying the appeals process and donot affect any other MMS rules orrequirements.

Section 290.5 How do I Pay MyProcessing Fee?

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

Section 290.7 What is the Filing Datefor My Appeal?

Comment—We received numerouscomments criticizing the complexity ofthe proposed appeals rule.

Response—We believe it would bedesirable to simplify this OMM appealsrule by removing the provisions insections 290.5, 290.6 and 290.7 of theproposed rule.

We are deleting the requirement topay the processing fee by electronicfunds transfer, based uponconversations with officials in theTreasury Department. Therefore, youmay pay by following the procedures inplace at 30 CFR 218.51. We are alsoremoving the parts dealing with awaiver of the $150 processing feeimposed on each appeal. The operatorson the Outer Continental Shelf (OCS)are large enough that they would not beable to justify the need for a waiver ofa $150 processing fee for their appeal.Also, because the amount of the fee isnominal, the waiver provision in theproposed rule is not needed to meet therequirements of the Small BusinessRegulatory Enforcement and FairnessAct or the Regulatory Flexibility Act.

The date the appeal is filed willcontinue to be, as in the past, the datethe Notice of Appeal is received in theOMM office. The processing fee will bepaid by check with the Notice ofAppeal.

Subpart B—Appeals of RoyaltyManagement Program and DelegatedState Orders

Comments—We received nocomments on this subpart because itwas not separately proposed. Therevisions made in this subpartincorporate portions of the proposedappeals rule that are necessary toimplement certain provisions of RSFA,and to separate appeals of royalty-related orders from appeals of OffshoreMinerals Management Program orders.The OMM-related appeals are few innumber and under the new subpart Awill go directly to the IBLA. We didreceive comments on some of thedefinitions in the proposed appeals rulethat are contained in this part. Therevisions made in this subpart alsorewrite the headings in former part 290in ‘‘plain language,’’ and clarify portionsof former part 290.

In addition, we deleted former section290.4 titled ‘‘Oral Argument’’ becausethey were rarely requested and rarelygranted. This is also consistent with the

proposed rule which did not provide forappellants to request oral argumentbefore the IBLA.

Section 290.100 What is the Purpose ofThis Subpart?

Comments—We did not receive anycomments on this section.

Response—The purpose of thissubpart is to provide the procedures toappeal MMS or delegated State ordersconcerning reporting to the MMS’s RMPand the payment of royalties and otherpayments due under leases subject tothis subpart. Subpart A of this partapplies to appeals of MMS’s OMMprogram actions.

Section 290.101 What Leases AreSubject to This Subpart?

Comments—We received nocomments on this subpart.

Response—This section is the same asproposed 43 CFR 4.902. We specificallynote that the scope of this subpart is notlimited to those orders that are subjectto RSFA time of decision requirementsin 30 U.S.C. 1724(h). This subpartcovers all appeals of RMP or delegatedState orders, including ordersconcerning Federal leases for mineralsother than oil and gas, all Indian leases,orders to provide information, producedocuments, etc., and is not limited toFederal oil and gas leases. Included inthis subpart are some provisionsspecific to orders that RSFA covers.

Section 290.102 What DefinitionsApply to This Subpart?

Comments—This section containsdefinitions that are similar to thosefound in proposed 43 CFR 4.903, forwhich we received comments to whichwe respond in our preamble discussionof 43 CFR part 4 subpart J in this finalrulemaking. Please refer to thecomments and responses to definitionsin that subpart in this preamble. Thereare some differences in definitionsbecause 43 CFR part 4 subpart J appliesonly to orders that are subject to RSFAtime of decision and rule of decisionrequirements. The coverage of thissubpart, in contrast, is broader. Thosedifferences are apparent from the text ofthe definitions. For definitions includedin this part that are not in 43 CFR part4 subpart J there were no comments.

Section 290.103 Who May File anAppeal?

Comments—We received nocomments on this section.

Response—We retained therequirement formerly found at 30 CFR290.2 that you may appeal an order youreceive if it adversely affects you or yourlessee. We also added the provision



proposed as 43 CFR 4.904(b) allowinglessees that receive a Notice of Order toeither appeal the order or join in theirdesignee’s appeal under § 290.106.

Section 290.104 What May I NotAppeal Under This Subpart?


Response—This addition to thissubpart was proposed as 43 CFR4.905(a) and (c).

Section 290.105 How Do I Appeal anOrder?


Response—We combined therequirements found in former 30 CFR290.3, 290.5 and 290.6, and rewrotethem in plain language. We alsoeliminated 30 CFR 290.3(b) whichrequired a field report. This isconsistent with the agency’s andindustry’s desire to accelerate theappeals process.

Section 290.106 How Do Lessees Join aDesignee’s Appeal and What is theEffect of Joinder?


Response—This section was proposedas 43 CFR 4.908. We made minorchanges necessary to reflect that theappeal is to the MMS Director underthis part, not the Office of Hearings andAppeals.

Section 290.107 Where are the RulesConcerning the Effect of the DepartmentNot Issuing a Decision in My AppealWithin the Statutory Time Frame?


Response—This section wasnecessary to direct appellants to therules concerning the effect of DOI notissuing a decision in your appeal withinthe 33-month period prescribed under30 U.S.C. 1724(h). Those rules arelocated in 43 CFR part 4 subpart J.

Section 290.108 How Do I Appeal tothe IBLA?


Response—This section was theformer 30 CFR 290.7. We added aprovision that directs appellants to 43CFR part 4 subpart E.

Section 290.109 How Do I Request anExtension of Time?

Comments—See preamble discussionof 43 CFR 4.909.

Response—See preamble discussionof 43 CFR 4.909. This section wasproposed as 43 CFR 4.958. We made

minor changes necessary to reflect thatthe appeal is to the MMS Director underthis part, not OHA, and to differentiatethose appeals that involve extensions ofthe RSFA time of decision requirementsfrom those that do not.

Department Hearings and AppealsProcedures

IX. Section-by-Section Analysis, 43 CFRPart 4—

Subpart J—Special Rules Applicable toAppeals Concerning Federal Oil andGas Royalties and Related Matters

Section 4.901 What Is the Purpose ofThis Subpart?

Comments—We did not receive anycomments on this section.

Response—Even though we did notreceive any comments on this section,we must amend the text because we arenot finalizing the entire proposed rule atthis time. The purpose of this subpart isrevised to explain how the time limitsof 30 U.S.C. 1724(h) apply to appealssubject to this subpart.

Section 4.902 What Appeals areSubject to This Subpart?

Comments—In the proposed rule, thissection heading read, ‘‘What leases aresubject to this subpart?’’ We received nocomments on that section.

Response—Even though we did notreceive any comments on this section,we must amend the text because we arenot finalizing the entire proposed rule atthis time. The section heading ischanged to read, ‘‘What appeals aresubject to this subpart?’’ We had tochange the heading and content of thissection to make clear what appeals thissubpart applies to because the solepurpose of this subpart is to implementthe time limits and rule of decision of30 U.S.C. 1724(h). Because section1724(h) only applies to appeals oforders involving Federal oil and gasleases, this section will state that thesubpart applies only to appeals of ordersor portions of orders involving thepayment of royalties and otherpayments due, and the taking ordelivery of royalty in kind, underFederal oil and gas leases. Moreover, itwould make clear that its provisionsapply to appeals to the MMS Directorunder 30 CFR part 290 before this rulebecame effective, appeals to the MMSDirector under new 30 CFR part 290subpart B after this rule becameeffective, and appeals to the IBLA under43 CFR part 4 subpart E, both before andafter the effective date of this rule. Thissection further specifies that thissubpart does not apply to appeals oforders (or portions of orders) that

involve Indian leases or Federal leasesfor minerals other than oil and gas, orthat relate to Federal oil and gas leasesbut do not involve a monetary ornonmonetary obligation.

Section 4.903 What Definitions Applyto This Subpart?

Comments—We received severalcomments that the definition of ‘‘lessee’’in the proposed rule should quote thedefinition in RSFA. The commentersbelieved that it was inconsistent withRSFA to define lessees to includepersons to whom a lease interest isassigned.

Response—In the proposed rule, wedecided not to quote the exact definitionof ‘‘lessee’’ found in RSFA because theproposed rule applied to more than oiland gas leases subject to RSFA.Moreover, we do not believe that theadditional language in the proposed ruleis inconsistent with RSFA. The RSFAdefinition states that ‘‘lessee’’ includes‘‘any person to whom operating rightshave been assigned.’’ The proposed ruledefines ‘‘lessee’’ to include ‘‘any personto whom all or part of the lessee’sinterest or operating rights in a leasesubject to this subpart has beenassigned.’’ We do not believe that it isinconsistent with RSFA, or any law, todefine a ‘‘lessee’’ as a person to whomall or part of the lessee’s interest hasbeen ‘‘assigned,’’ or, in other words, towhom all or part of the lessee’s interesthas been sold. To the contrary, it wouldbe inconsistent with RSFA andprevailing law and regulations to statethat assignees of leases are not lessees.Therefore, we are not changing thedefinition of ‘‘lessee’’ in the proposedrule.

Comments—We received severalcomments on the definition of‘‘monetary obligation’’ in the proposedrule. Commenters for the State ofCalifornia Controller’s Office felt thatthe proposed definition ‘‘inviteddispute’’ over what an ‘‘issue’’ is,because ‘‘a particular underpaymentmay be attributable to overlappingregulatory violations.’’ Thus, theCalifornia Controller’s Office suggestedthat it would be more administrativelyefficient if a monetary obligation wasdefined as the total amount stated orestimated in the order. Anothercommenter stated that the plainmeaning of monetary is ‘‘payable inmoney,’’ and by including orders torecalculate royalties, DOI is ‘‘attemptingto circumvent’’ the default decisionprovisions of 30 U.S.C. 1724(h). Finally,two commenters believe that RSFArequires us to define monetaryobligation as ‘‘the principal amount dueon each lease for each month’’ because



that is what is required under the RSFAdefinition of an ‘‘order to pay.’’

Response—With respect to theCalifornia Controller’s Office’s commentthat ‘‘monetary obligation’’ should bedefined as the total amount ofunderpayments in an order, we do notbelieve that the definition wasconfusing. We believe that becauseorders identify the specific regulatoryviolation and the associatedunderpayment, there should be noconfusion. For example, if an orderstated an underpayment amountattributable to a lessee’s failure toinclude tax reimbursements in its grossproceeds, and stated anotherunderpayment amount attributable to animproper deduction from the lessee’sgross proceeds, we believe it is clearthat although both violations involvethe gross proceeds rule, they stem fromdifferent issues and involve separateunderpayments, and thus it isreasonable to consider them to beseparate obligations.

We disagree with the inference drawnby the commenter who asserted that theonly interpretation of ‘‘monetary’’ is‘‘payable in money.’’ We are notattempting to circumvent the defaultdecision provisions of section 1724(h)by including orders to recalculate andpay in the definition of monetaryobligation. First, as we stated in thepreamble to the proposed rule, Congressdid not define ‘‘monetary.’’ However,both Webster’s Dictionary and Black’sLaw Dictionary define monetary as‘‘related to’’ money. We believe thatorders to recalculate and pay are clearlyrelated to money, and include arequirement to pay money, and as suchare ‘‘monetary’’ in nature. Second, theonly ‘‘obligation’’ of a lessee underRSFA that is nonmonetary, and not‘‘related to money’’ is a lessee’s duty todeliver royalty in kind. Therefore, weare not amending this definition to statethat monetary obligations do notinclude orders to recalculate and pay.

We also disagree with the commentsthat because RSFA defines an ‘‘order topay’’ as a written order that‘‘specifically identifies the obligation bylease, production month and monetaryamount of such obligation’’ we mustdefine monetary obligation the sameway. As stated above, Congress did notdefine monetary obligation. Congressdid, however, define ‘‘obligation.’’Under RSFA, an ‘‘obligation’’ is aspecified lessee duty ‘‘which arises fromor relates to any lease * * * or anymineral leasing law * * * *’’ 30 U.S.C.1702(25)(B). Therefore, we disagree withthe commenters that an obligation mustbe limited to one lease. We also do notagree that an obligation must be limited

to one month. Rather, RSFA implies thatan ‘‘obligation’’ may be issue-specific(‘‘related to any mineral leasing law,’’which includes regulations).Accordingly, we are not changing theproposed definition of monetaryobligation in the manner the commenterrequests.

We are revising the definition ofmonetary obligation as proposed toclarify that monetary obligation alsoincludes the Secretary’s duty to pay,refund, offset, or credit the amount ofany obligation that a lessee, designee, orpayor has asserted in a request forpayment, refund, offset, or credit thatMMS or a delegated State has denied.This follows from the definitions of‘‘demand’’ and ‘‘obligation’’ in the new30 U.S.C. 1702(23)(B) and (25)(A)(ii) asadded to FOGRMA by RSFA section 2,110 Stat. 1701. Administrative appealsof denials of requests by lessees,designees, or payors for refund, offset,credit, etc., are subject to the RSFA timeof decision and rule of decisionrequirements of 30 U.S.C. 1724(h),which covers both ‘‘demands’’ and‘‘orders issued by the Secretary or adelegated State’’ that are ‘‘subject toadministrative appeal in accordancewith the regulations of the Secretary.’’

Comments—Several commentersobjected to our decision to includesubsection (2)(i) in the definition of‘‘order’’ which states that orders do notinclude nonmandatory valuationdeterminations. Some commenters feltthat defining a valuation determinationthat does not have mandatory orordering language to not be anappealable ‘‘order’’ conflicts with othersections of MMS valuation regulationsthat allow lessees to request valuationdeterminations, such as 30 CFR206.257(f). The commenters felt thatunder the current regulations, allvaluation determinations must bemandatory. One commenter stated thatthe definition creates ‘‘two types ofvaluation determinations, those thatcontain mandatory or ordering languageand those that do not. Only those thatcontain mandatory or ordering languagewould be appealable.’’ We receivedsimilar comments regarding ourproposal to make nonmandatory policydeterminations non-appealable. Onecommenter stated that subpoenas thatdo not meet the requirements of 30U.S.C. 1724(d)(2) should be appealable.

Response—We have provided that anorder is appealable only when thedocument ‘‘contains mandatory orordering language’’—in other words,when the disputed legal issues and thefacts involved are sufficiently definite toallow for meaningful adjudication. Aswe stated in the proposed rule, we do

not consider advice or guidancecontained in a nonmandatory valuationdetermination to be an ‘‘order’’ becauseit does not compel anyone to takeparticular action. Likewise, generalpolicy guidance contained in a letter topayors does not contain mandatorylanguage requiring lessees to doanything. If the advice or guidance doesnot require the lessee to do anything,there is nothing to appeal.

For example, it is possible for a lesseeto first receive a ‘‘Dear Payor’’ letter orvaluation determination with generaladvice, next a request or subpoena fordocuments that would enable theGovernment to evaluate whether thelessee has followed that advice, and,finally, an order applying theGovernment’s understanding of the lawand facts that could be tested in anadministrative appeal. Lastly, we do notbelieve that making nonmandatoryvaluation determinations non-appealable conflicts with othervaluation regulations. Those regulationsallow lessees to request a valuationdetermination. If MMS issues a bindingdetermination under those rules inresponse to the request, then such adetermination is appealable. Therefore,for the reasons explained above, we arenot changing the definition of order tomake nonmandatory advice andguidance appealable.

We disagree with the comment thatwe should define subpoenas as beingappealable orders. As we stated in thepreamble, subpoenas are enforceabledirectly by the United StatesGovernment in Federal district courtunder 30 U.S.C. 1717(b), and are notsubject to administrative appeal.Nothing in section 1724(d)(2) changesthat fact. Therefore, they also are notappealable ‘‘orders,’’ and we are notchanging the rule as the commentersuggested.

Because the purpose of this subpart isto implement the RSFA decisiondeadlines and rules of decision in 30U.S.C. 1724(h)(1) and (2), and is not partof a general appeals provision asproposed, we have narrowed thedefinition of ‘‘order’’ for purposes ofthis subpart only. That definition makesclear that orders under this subpart areonly those orders that involve eithermonetary obligations or nonmonetaryobligations under Federal oil and gasleases and therefore subject to 30 U.S.C.1724(h)(1) and (2) as enacted by RSFA.

We also have revised the proposeddefinition of order to clarify that orderdoes not include a Notice ofNoncompliance or Notice of CivilPenalty issued under the provisions ofFOGRMA section 109, 30 U.S.C. 1719,and implementing regulations at 30 CFR



part 241. Nor does order include adecision of an administrative law judgefollowing a hearing on the record on aNotice of Noncompliance or Notice ofCivil Penalty under FOGRMA section109(e), 30 U.S.C. 1719(e), and associatedregulations. Likewise, order does notinclude a decision of the IBLA onappeal from a decision of anadministrative law judge following ahearing on the record. This follows fromthe first sentence of 30 U.S.C.1724(h)(1), which establishes that theRSFA time of decision and rule ofdecision requirements cover ‘‘demandsor orders issued by the Secretary or adelegated State’’ that are ‘‘subject toadministrative appeal in accordancewith the regulations of the Secretary.’’FOGRMA civil penalty assessmentsresult from an entirely different processthat is prescribed separately by statute.

Civil penalty assessments do notresult from administratively appealableMMS or delegated State orders. Instead,FOGRMA section 109(e) prescribes thatno civil penalty may be assessed untila person has been given an opportunityfor a ‘‘hearing on the record’’—i.e., aformal trial-type hearing before anadministrative law judge, which mustbe conducted under AdministrativeProcedure Act provisions at 5 U.S.C.554, 556, and 557. The rules at 30 CFRpart 241 implement the statutoryrequirements of those sections regardingadjudication and agency review.

It appears plain that Congress did notintend for the RSFA time of decisionand rule of decision requirements tocover FOGRMA civil penaltyproceedings. RSFA itself is primarily anamendment to FOGRMA with respect toFederal leases. Had Congress intendedto change the statutory civil penaltyprocedures, it knew how to do so andcould have done so. There is nomention of any intent to include civilpenalty proceedings within the 30U.S.C. 1724(h) requirements. Moreover,the purpose of section 1724(h) was toaddress perceived problems withMMS’s administrative appeal processthat are unrelated to civil penaltyproceedings.

Comment—We did not receive anycomments on the definition of ‘‘party.’’

Response—Even though we did notreceive any comments, we revised thedefinition of ‘‘party’’ to delete thereference to persons who fileintervention briefs and to make otherchanges necessary to reflect that we arenot finalizing the entire proposed rule atthis time.

Comments—We did not receive anycomments on the definition of ‘‘noticeof an order.’’

Response—Even though we did notreceive any comments, we revised thedefinition of ‘‘notice of an order’’ todelete the reference to 30 CFR part 242because we are not finalizing that partof the proposed rule at this time.

Comments—We received commentsstating that we should include the RSFAdefinition of ‘‘demand’’ in our final rule.

Response—We disagree. The portionsof the proposed rule that we are makingfinal do not use the term ‘‘demand.’’The substance of what RSFA defines asa ‘‘demand’’ is encompassed withinorders that are subject to this subpart.Therefore, it is not necessary to define‘‘demand’’ separately in this rule.

Section 4.904 When Does My AppealCommence and End?

Comments—Several commenterssuggested that an appeal shouldcommence, for purposes of calculatingthe beginning of the 33-month periodunder section 1724(h)(1), on the date anMMS order is received by the recipient.Some commenters stated that theybelieve that under administrative lawprinciples, an agency order that directsa person to take action starts theperson’s appellate rights. Thus, theyargue that our definition of‘‘commence’’ discourages an appellantfrom exercising those rights andcompromises administrative dueprocess in order to delaycommencement of an appeal until wereceive all of the items required in theproposed rule. One commenter believesthat the definition for ‘‘commencement’’under RSFA applies to the appealsprocess.

Response—Although we are notfinalizing the section of the proposedrule that these comments were directedto at this time, the comments are equallyapplicable to this section, which wasproposed as section 4.971. We recognizeboth that the MMS order is effectivewhen it is received and that a recipientmay have to wait more than 33 monthsfrom that date for a decision by DOIbecause an appeal will not commenceunder this rule until MMS receives thenotice of appeal and statement ofreasons under former 30 CFR part 290,before the new revised 30 CFR part 290subpart B, promulgated with thisrulemaking, became effective. It is therecipient of the order who‘‘commences’’ an appeal, not DOI. UntilDOI has received a Notice of Appeal,there is no dispute to be adjudicated,and until DOI has received a Statementof Reasons giving some reasons for theappellant’s disagreement with the order,it cannot evaluate whether theappellant’s disagreement has any merit.Because the recipient of the order

controls when these items aresubmitted, we believe it is a reasonableinterpretation of section 1724(h)(1) thatthe 33-month period begins to run whenMMS has received at least minimallysufficient documentation to begin theprocess of deciding the appeal. We alsobelieve that this interpretation enhancesthe decision-making process.

We have remedied this problem underthe new 30 CFR part 290 subpart B insection 290.109(b) and (c). Under thenew subpart B, you may request anextension of time to file your statementof reasons if you agree to extend theRSFA time of decision requirementunder 30 U.S.C. 1724(h)(1). (Under 30CFR 290.105(b), there is no extension oftime to file a notice of appeal.) MMSrecognizes that different amounts oftime may be necessary for appellants toprepare their written submissions indifferent cases, depending on thenumber and complexity of issues, thetime needed to compile relevant factsand documents, etc. However, MMSbelieves that additional time needed inmore complicated cases should notoperate to the agency’s prejudice. At thesame time, it is in the interest of allparties to know relatively early if alessee or designee plans to contest anorder, and to provide a ‘‘bright line’’ forcommencement of the appeal. Hence,after the effective date of the new 30CFR part 290 subpart B and this section,your appeal commences for purposes ofsection 4.906 and 30 U.S.C. 1724(h)when you file your notice of appeal. Ifyou then need further time to prepareyour statement of reasons or briefs, youmust agree to extend the 33-monthperiod prescribed in 30 U.S.C.1724(h)(1).

Before the adoption of this rule,however, MMS received numerousappeals in which various extensions oftime to file statements of reasons weregranted, but in which a correspondingagreement by the appellant to extendthe RSFA 33-month period was notrequired and was not automatic. Hence,for the reasons described above, MMSbelieves the best reading ofcongressional intent is to regard theappeal as having commenced for RSFApurposes at the later of the date thenotice of appeal was filed or the date theinitial statement of reasons wasreceived.

If MMS were to adopt thecommenters’ suggestion that an appeal‘‘commenced’’ when the order wasreceived, several weeks, or evenmonths, of the 33-month period couldbe consumed without DOI being able toeither decide the order was correct orgrant relief if it decided otherwise.Especially in complicated cases, this



loss of time could seriouslydisadvantage DOI’s ability to considerthe merits of the appeal.

Moreover, we believe the commenterhas misconstrued RSFA’s definition of‘‘commencement.’’ As explained in thepreamble to the proposed rule, RSFAdid not define ‘‘commencement’’ forpurposes of the time of decisionrequirement in 30 U.S.C. 1724(h)(1)applicable to ‘‘administrativeproceedings.’’ RSFA did define‘‘commence’’ ‘‘with respect to a judicialproceeding’’ and ‘‘with respect to ademand.’’ 30 U.S.C. 1702(20). However,the definition of ‘‘commence’’ under1702(20) clearly does not encompass‘‘administrative proceedings’’ under 30U.S.C. 1724(h) or 1702(18). Rather,‘‘commence’’ under section 1702(20)deals with the ‘‘commencement’’ ofjudicial proceedings or demands forpurposes of the RSFA 7-year limitationsperiod under section 4(a), 30 U.S.C.1724(b). Accordingly, it is necessary forus in this proposed rule to define whenyour appeal ‘‘commenced’’ for purposesof section 1724(h).

We have therefore decided not toadopt the commenters’ position.

Section 4.906 What If the DepartmentDoes Not Issue a Decision by the DateMy Appeal Ends?

Comments—The only commentsreceived regarding this section asproposed (section 4.956) (other than thecomments regarding ‘‘commenced’’ andthe definition of ‘‘monetary obligation’’discussed above) were from the solidminerals industry. The trade associationcommenter and individual companiesagain requested that DOI make theRSFA rule of decision in this sectionapplicable to appeals involving solidmineral leases.

Response—For the reasons set forth inthe preamble to the proposed rule, wehave decided not to make this sectionapplicable to solid mineral leases. Wedo not believe that there is any benefitin imposing a mandatory decisionwhere DOI has not been statutorilydirected to do so.

We have, however, made changesnecessary to reflect the fact that we arenot publishing the proposed rule in itsentirety at this time. Those changeswould include provisions that refer toappeals to the MMS Director under 30CFR part 290 before 30 CFR part 290subpart B became effective, appeals tothe MMS Director under the new 30CFR part 290 subpart B (after thissubpart became effective) and appeals tothe IBLA under 43 CFR part 4 subpartE, both before and after the effectivedate of this subpart.

Section 4.908 What Is theAdministrative Record for My Appeal IfIt Is Deemed Decided?


Response—Even though we did notreceive any comments, we madechanges necessary to reflect the fact thatwe are not finalizing the entire proposedrule at this time. Those changes wouldinclude provisions that refer to therecord in appeals to the MMS Directorunder 30 CFR part 290 before 30 CFRpart 290 subpart B became effective,appeals to the MMS Director under thenew 30 CFR part 290 subpart B and therecord in appeals to the IBLA under 43CFR part 4 subpart E, both before andafter the effective date of this rule.

Section 4.909 How Do I Request anExtension of Time?

Comments—We received onecomment on this section (proposedsection 4.958) from an industryrepresentative and one from a tradeassociation. The industry commenterfelt that the rule should grant requestsfor extensions of time automatically,rather than leave it to the discretion ofthe official to whom the request issubmitted. The trade associationcommenter felt that DOI should ‘‘freely’’grant requests. The commenter also feltthat we should make clear that partiescould ask for extensions of time for anyreason, including the filing of pleadings.

Response—We agree that partiesshould be able to request extensions oftime for any reason, including forsubmissions of pleadings. It was not ourintent in the proposed rule to restrictsuch requests. Therefore, to clarify thatparties may request extensions for anypurpose, we modified this section byeliminating the language in proposedparagraph (a) that stated parties couldrequest an extension ‘‘to meet any filingrequirement under this subpart, or forDOI to issue a final decision in yourappeal.’’ Section (a) now states:

If you are a party to an appeal subject tothis subpart before the IBLA, and you needadditional time after an appeal commencesfor any purpose, you may obtain an extensionof time under this section.

With respect to the comment aboutautomatic extensions, although weexpect that we will grant these requestsliberally, we are not going to bind futureofficials to granting automaticextensions by rule. RSFA states that the33-month period may be extended if theSecretary and appellant agree in writing.We do not know what circumstancesmay exist in any particular case thatwould lead us to not agree to arequested extension.

IX. Procedural Matters

Regulatory Planning and Review E.O.12866

This document is not a significantrule and is not subject to review by theOffice of Management and Budget underExecutive Order 12866.

(1) This rule will not have an annualeffect of $100 million or more on theeconomy. It will not adversely affect ina material way the economy,productivity, competition, jobs, theenvironment, public health or safety, orState, local, or tribal governments orcommunities. This rule does not requirethe payment of additional revenues.This rule sets out how the Departmentwill review MMS’s implementation ofroyalty and OCS operations policy.

(2) This rule will not create a seriousinconsistency or otherwise interferewith an action taken or planned byanother agency. The primary functionsof appealable MMS orders are collectingroyalties from the minerals industry andregulating operations of mineral leaseson the OCS. Other agency functions donot cover these areas.

(3) This rule does not alter thebudgetary effects or entitlements, grants,user fees, or loan programs or the rightsor obligations of their recipients. Theadministrative appeals process has noimpact on or relation to grants, userfees, loan programs, or the rights andobligations of their recipients.

(4) This rule does not raise novel legalor policy issues arising out of legalmandates, the President’s priorities, orthe principles set forth in E.O. 12866.This rule was developed in consultationwith States, tribes, and industry.

Regulatory Flexibility ActThe Department of the Interior

certifies that this document will nothave a significant economic effect on asubstantial number of small entitiesunder the Regulatory Flexibility Act (5U.S.C. 601 et seq.). Accordingly, a SmallEntity Compliance Guide is notrequired.

This rule will affect three groups ofindividuals or companies: (1) Indianlessors, (2) lessees and operators onoffshore leases, and (3) lessees, payors,and designees on Federal and Indianleases (onshore and offshore). Indianlessors are either tribes or individuals.However, Indian tribes are notconsidered to be small entities for thepurposes of the Regulatory FlexibilityAct, and individuals do not fit thedefinition of small entities. As for theremaining groups, the majority oflessees, designees, payors, and operatorson Federal and Indian onshore leaseswould be classified as small businesses



according to the definitions in the SmallBusiness Administration StandardIndustry Code (SIC). Changes in the rulethat could have an economic effect onthese groups are the establishment ofprocessing fees for filing a Notice ofAppeal and a Statement of Reasons (tothe extent that any small businesses areoperating on the OCS), posting a bond,and an increase in the maximum civilpenalty to $25,000.

Bonding or payment is mandatory forappealed amounts above $10,000 onFederal leases and $1,000 for Indianleases. Appealed amounts less than$10,000 for Federal and $1,000 forIndian leases do not require bondingwhich typically provides relief to smallentities. The ability to demonstratefinancial responsibility provides reliefof credit charges from surety companies.

The rule changes the maximum civilpenalty to up to $25,000 per day forthose acts for which FOGRMA allowssuch a penalty. A larger penalty shouldnot have significant economic impactsbecause MMS assesses penalties onlywhen business operations have reacheda very poor level of conduct. Lesseesand other payors may use a variety ofremedies including ADR before theassessment of a penalty.

Small Business Regulatory EnforcementFairness Act (SBREFA)

This rule is not a major rule under 5U.S.C. 804(2), the Small BusinessRegulatory Enforcement Fairness Act.This rule:

a. Does not have an annual effect onthe economy of $100 million or more;

b. Will not cause a major increase incosts or prices for consumers,individual industries, Federal, State, orlocal government agencies, orgeographic regions; and

c. Does not have significant adverseeffects on competition, employment,investment, productivity, innovation, orthe ability of U.S.-based enterprises tocompete with foreign-based enterprises.This is an administrative reviewprocess; there is no impact on thesethings. The rule sets a time limit onwhen an appealed issue must beresolved or decided, and gives relieffrom maintaining bonds in manyinstances.

Unfunded Mandates Reform ActThis rule does not impose an

unfunded mandate on State, local, ortribal governments or the private sectorof more than $100 million per year. Therule does not have a significant orunique effect on State local or tribalgovernments or the private sector. Thisrule does not change the relationshipbetween MMS, IBLA, and State, local, or

tribal governments. A statementcontaining the information required bythe Unfunded Mandates Reform Act (2U.S.C. 1531 et seq.) is not required.

Takings (E.O. 12630)

In accordance with Executive Order12630, the rule does not have significanttakings implications. The rule wouldnot take away or restrict an entity’s rightto appeal or bond orders received fromMMS or a delegated State. A takingsimplication assessment is not required.

Federalism (E.O. 12612)

In accordance with Executive Order12612, the rule does not have sufficientfederalism implications to warrant thepreparation of a Federalism Assessment.The rule does not change the role orresponsibilities among Federal, State,and local governmental entities. Therule does not relate to the structure androle of States and will not have direct,substantive, or significant effects onStates. A Federalism Assessment is notrequired.

Civil Justice Reform (E.O. 12988)

In accordance with Executive Order12988, the Office of the Solicitor hasdetermined that this rule does notunduly burden the judicial system andmeets the requirements of §§ 3(a) and3(b)(2) of the Order. The rule has beenreviewed and describes in clearlanguage what is allowed and what isprohibited. The IBLA and MMS havedrafted this rule in plain language andhave consulted with the Department ofthe Interior’s Office of the Solicitor, RPCSubcommittee, States, and tribesthroughout the rulemaking process.

Paperwork Reduction Act

The Office of Management and Budget(OMB) approved the informationcollection requirements contained inthis rule under 44 U.S.C. 3501 et seq.,and assigned OMB Control Numbers1010–0121 and 1010–0122. The burdenhours for the reporting requirements in30 CFR part 290 are approved underOMB Control Number 1010–0121.Under the Paperwork Reduction Act, anagency may not conduct or sponsor, anda person is not required to respond to,a collection of information unless itdisplays a currently valid OMB ControlNumber. You may obtain a copy of theinformation collections by contactingthe Bureau’s Information CollectionClearance Officer at (202) 208–7744.

National Environmental Policy Act

This rule does not constitute a majorFederal action significantly affecting thequality of the human environment. Adetailed statement under the National

Environmental Policy Act of 1969 is notrequired.

Clarity of This RegulationExecutive Order 12866 requires each

agency to write regulations that are easyto understand. We invite yourcomments on how to make this ruleeasier to understand, including answersto questions such as the following: (1)Are the requirements in the rule clearlystated? (2) Does the rule containtechnical language or jargon thatinterferes with this clarity? (3) Does theformat of the rule (grouping and orderof sections, use of headings,paragraphing, etc.) aid or reduce itsclarity? (4) Would the rule be easier tounderstand if it were divided into more(but shorter) sections? (A ‘‘section’’appears in bold type and is preceded bythe symbol ‘‘§ ’’ and a numberedheading; for example § 4.904.) (5) Is thedescription of the rule in theSUPPLEMENTARY INFORMATION section ofthe preamble helpful in understandingthe rule? What else could we do to makethe rule easier to understand?

Send a copy of any comments thatconcern how we could make this ruleeasier to understand to: Office ofRegulatory Affairs, Department of theInterior, Room 7229, 1849 C Street NW,Washington, DC 20240. You may also e-mail the comments to this address:[email protected].

List of Subjects

30 CFR Part 208Continental shelf, Government

contracts, Mineral royalties, Petroleum,Public lands—Mineral resources,Reporting and recordkeepingrequirements, Small businesses, Suretybonds.

30 CFR Part 241Continental shelf, Government

contracts, Indian lands, Mineralroyalties, Natural gas, Penalties,Petroleum, Public lands—Mineralresources, Reporting and recordkeepingrequirements.

30 CFR Part 243Coal, Continental shelf, Geothermal

energy, Government contracts, Indianlands, Mineral royalties, Natural gas,Petroleum, Public lands—Mineralresources, Surety bonds.

30 CFR Part 250Continental shelf, Environmental

impact statements, Environmentalprotection, Government contracts,Incorporation by reference,Investigations, Mineral royalties,Natural gas, Oil and gas developmentand production, Oil and gas exploration,



Oil and gas reserves, Penalties,Petroleum, Pipelines, Public lands—Mineral resources, Public lands—rights-of-way, Reporting and recordkeepingrequirements, Sulphur development andproduction, Sulphur exploration, Suretybonds.

30 CFR Part 290

Administrative practice andprocedure.

43 CFR Part 4

Administrative practice andprocedures, Continental Shelf, Mineralroyalties, Natural Gas, Petroleum, PublicLands—mineral resources.Sylvia V. Baca,Acting Assistant Secretary—Land andMinerals Management.

John Berry,Assistant Secretary for Policy, Managementand Budget.

Kevin Gover,Assistant Secretary for Indian Affairs.

For the reasons set out in thepreamble, MMS and OHA are amending30 CFR Parts 208, 241, 243, 250, and290; reserving 30 CFR part 242 andadding 43 CFR part 4, subpart J asfollows:

TITLE 30—MINERAL RESOURCES

PART 208—SALE OF FEDERALROYALTY OIL

1. The authority citation for part 208is revised to read as follows:

Authority: 5 U.S.C. 301 et seq.; 30 U.S.C.181 et seq., 351 et seq., 1701 et seq.; 31 U.S.C.9701; 41 U.S.C. 601 et seq.; 43 U.S.C. 1301et seq., 1331 et seq., and 1801 et seq.

2. In § 208.2, new definitions areadded in alphabetical order to read asfollows:

§ 208.2 Definitions.

* * * * *Contracting officer means the

Director, his or her delegate, or theperson designated under a royalty oilpurchase contract.* * * * *

Contracting officer’s decision meansan MMS order or decision that acontracting officer issues under this part

to a purchaser of oil under a royalty oilpurchase contract.* * * * *

3. Section 208.16 is revised to read asfollows:

§ 208.16 How to appeal a contractingofficer’s decision that you receive.

If you receive a contracting officer’sdecision, you may:

(a) Appeal that decision to the Boardof Contract Appeals in the Office ofHearings and Appeals, Office of theSecretary, in accordance with theprocedures provided in 43 CFR part 4,subpart C; or

(b) File an action in the United StatesCourt of Federal Claims.

PART 241—PENALTIES

4. The authority citation for part 241continues to read as follows:

Authority: 25 U.S.C 396 et seq.; 25 U.S.C.396a et seq.; 25 U.S.C. 2101 et seq.; 30 U.S.C.181 et seq.; 30 U.S.C. 351 et seq.; 30 U.S.C.1001 et seq.; 30 U.S.C. 1701 et seq.; 43 U.S.C.1301 et seq.; 43 U.S.C. 1331 et seq.; and 43U.S.C. 1801 et seq.;

§ 241.20 [Removed]5. Section 241.20 is removed and

subpart A is reserved.6. Subpart B is revised to read as

follows:

Subpart B—Penalties for Federal and IndianOil and Gas Leases

Definitions241.50 What definitions apply to this

subpart?

Penalties after a Period To Correct241.51 What may MMS do if I violate a

statute, regulation, order, or lease termrelating to a Federal or Indian oil and gaslease?

241.52 What if I correct the violation?241.53 What if I do not correct the

violation?241.54 How may I request a hearing on the

record on a Notice of Noncompliance?241.55 Does my request for a hearing on the

record affect the penalties?241.56 May I request a hearing on the

record regarding the amount of a civilpenalty if I did not request a hearing onthe Notice of Noncompliance?

Penalties Without a Period To Correct241.60 May I be subject to penalties without

prior notice and an opportunity tocorrect?

241.61 How will MMS inform me ofviolations without a period to correct?

241.62 How may I request a hearing on therecord on a Notice of Noncomplianceregarding violations without a period tocorrect?

241.63 Does my request for a hearing on therecord affect the penalties?

241.64 May I request a hearing on therecord regarding the amount of a civilpenalty if I did not request a hearing onthe Notice of Noncompliance?

General Provisions

241.70 How does MMS decide what theamount of the penalty should be?

241.71 Does the penalty affect whether Iowe interest?

241.72 How will the Office of Hearings andAppeals conduct the hearing on therecord?

241.73 How may I appeal theAdministrative Law Judge’s decision?

241.74 May I seek judicial review of thedecision of the Interior Board of LandAppeals?

241.75 When must I pay the penalty?241.76 Can MMS reduce my penalty once it

is assessed?241.77 How may MMS collect the penalty?

Criminal Penalties

241.80 May the United States criminallyprosecute me for violations underFederal and Indian oil and gas leases?

Subpart B—Penalties for Federal andIndian Oil and Gas Leases

Definitions

§ 241.50 What definitions apply to thissubpart?

The terms used in this subpart havethe same meaning as in 30 U.S.C. 1702.

Penalties After a Period To Correct

§ 241.51 What may MMS do if I violate astatute, regulation, order, or lease termrelating to a Federal or Indian oil and gaslease?

(a) If we believe that you have notfollowed any requirement of a statute,regulation, order, or terms of a lease forany Federal or Indian oil or gas lease,we may send you a Notice ofNoncompliance telling you what theviolation is and what you need to do tocorrect it to avoid civil penalties under30 U.S.C. 1719(a) and (b).

(b) We will send the Notice to youraddress of record as shown in thefollowing table:

For notices of noncompliance to— The addressee of record is— And—

(1) A refiner or other party involvedin disposition of Federal royaltytaken in kind.

The position title, department name and address, or individual nameand address in the executed royalty sale contract; or a differentposition title, department name and address, or individual nameand address that the refiner or other party under the executed roy-alty sale contract identifies in writing for billing purposes; or anagent designated in writing to receive notices of noncompliance.

The refiner or other party must no-tify MMS in writing of all ad-dressee changes.



For notices of noncompliance to— The addressee of record is— And—

(2) Any person required to report oilor gas removed from Federal orIndian leases to the RMP Produc-tion Accounting and Auditing Sys-tem.

The most recent position title, department name and address, or in-dividual name and address that RMP has in its records for the re-porter/payor; or an agent designated in writing to receive noticesof noncompliance.

The reporter/payor must notifyRMP, in writing, of any ad-dressee changes.

(3) A lessee, designee, reporter orpayor whose records are subjectto audit.

The position title, department name and address, or individual nameand address the lessee, designee, reporter or payor identifies inwriting at the initiation of the audit; or the most recent addresseethat the lessee, designee, reporter or payor specified in writing; oran agent designated in writing to receive notices of noncompli-ance.

The lessee, designee, reporter orpayor must notify MMS of anyaddressee changes.

(4) A reporter reporting on the ‘‘Re-port of Sales and Royalty Remit-tance’’ (Form MMS–2014).

The most recent position title, department name and address, or in-dividual name and address that the lessee, designee, reporter orpayor identifies in writing; or an agent designated in writing to re-ceive notices of noncompliance.

The lessee, designee, reporter orpayor is responsible for notifyingRMP in writing of any ad-dressee changes.

(5) A lessee, designee, reporter orpayor who remits rental and bo-nuses from nonproducing Federalleases.

The most recent position title, department name and address, or in-dividual name and address maintained in RMP records; or anagent designated in writing to receive notices of noncompliance.

The lessee, designee, reporter orpayor is responsible for notifyingRMP in writing of any ad-dressee changes.

(c) We will serve Notices ofNoncompliance by using registered mailor personal service.

§ 241.52 What if I correct the violation?The matter will be closed if you

correct all of the violations identified inthe Notice of Noncompliance within 20days after you receive the Notice (orwithin a longer time period specified inthe Notice).

§ 241.53 What if I do not correct theviolation?

(a) We may send you a Notice of CivilPenalty if you do not correct all of theviolations identified in the Notice ofNoncompliance within 20 days afteryou receive the Notice ofNoncompliance (or within a longer timeperiod specified in that Notice). TheNotice of Civil Penalty will tell you howmuch penalty you must pay. Thepenalty may be up to $500 per day,beginning with the date of the Notice ofNoncompliance, for each violationidentified in the Notice ofNoncompliance for as long as you donot correct the violations.

(b) If you do not correct all of theviolations identified in the Notice ofNoncompliance within 40 days afteryou receive the Notice ofNoncompliance (or 20 days followingthe expiration of a longer time periodspecified in that Notice), we mayincrease the penalty to up to $5,000 perday, beginning with the date of theNotice of Noncompliance, for eachviolation for as long as you do notcorrect the violations.

§ 241.54 How may I request a hearing onthe record on a Notice of Noncompliance?

You may request a hearing on therecord on a Notice of Noncompliance byfiling a request within 30 days of thedate you received the Notice of

Noncompliance with the HearingsDivision (Departmental), Office ofHearings and Appeals, U.S. Departmentof the Interior, 4015 Wilson Boulevard,Arlington, Virginia 22203. You may dothis regardless of whether you correctthe violations identified in the Notice ofNoncompliance.

§ 241.55 Does my request for a hearing onthe record affect the penalties?

(a) If you do not correct the violationsidentified in the Notice ofNoncompliance, the penalties willcontinue to accrue even if you requesta hearing on the record.

(b) You may petition the HearingsDivision (Departmental) of the Office ofHearings and Appeals, to stay theaccrual of penalties pending the hearingon the record and a decision by theAdministrative Law Judge under§ 241.72.

(1) You must file your petition within45 calendar days of receiving the Noticeof Noncompliance.

(2) To stay the accrual of penalties,you must post a bond or other suretyinstrument using the same standardsand requirements as prescribed in 30CFR part 243, subpart B, or demonstratefinancial solvency using the samestandards and requirements asprescribed in 30 CFR part 243, subpartC, for the principal amount of anyunpaid amounts due that are the subjectof the Notice of Noncompliance,including interest thereon, plus theamount of any penalties accrued beforethe date a stay becomes effective.

(3) The Hearings Division will grantor deny the petition under 43 CFR4.21(b).

§ 241.56 May I request a hearing on therecord regarding the amount of a civilpenalty if I did not request a hearing on theNotice of Noncompliance?

(a) You may request a hearing on therecord to challenge only the amount ofa civil penalty when you receive aNotice of Civil Penalty, if you did notpreviously request a hearing on therecord under § 241.54. If you did notrequest a hearing on the record on theNotice of Noncompliance under§ 241.54, you may not contest yourunderlying liability for civil penalties.

(b) You must file your request within10 days after you receive the Notice ofCivil Penalty with the Hearings Division(Departmental), Office of Hearings andAppeals, U.S. Department of theInterior, 4015 Wilson Boulevard,Arlington, Virginia 22203.

Penalties Without a Period To Correct

§ 241.60 May I be subject to penaltieswithout prior notice and an opportunity tocorrect?

The Federal Oil and Gas RoyaltyManagement Act sets out severalspecific violations for which penaltiesaccrue without an opportunity to firstcorrect the violation.

(a) Under 30 U.S.C. 1719(c), you maybe subject to penalties of up to $10,000per day per violation for each day theviolation continues if you:

(1) Knowingly or willfully fail tomake any royalty payment by the datespecified by statute, regulation, order orterms of the lease;

(2) Fail or refuse to permit lawfulentry, inspection, or audit; or

(3) Knowingly or willfully fail orrefuse to notify the Secretary, within 5business days after any well beginsproduction on a lease site or allocatedto a lease site, or resumes production inthe case of a well which has been off



production for more than 90 days, of thedate on which production has begun orresumed.

(b) Under 30 U.S.C. 1719(d), you maybe subject to civil penalties of up to$25,000 per day for each day eachviolation continues if you:

(1) Knowingly or willfully prepare,maintain, or submit false, inaccurate, ormisleading reports, notices, affidavits,records, data, or other writteninformation;

(2) Knowingly or willfully take orremove, transport, use or divert any oilor gas from any lease site withouthaving valid legal authority to do so; or

(3) Purchase, accept, sell, transport, orconvey to another person, any oil or gasknowing or having reason to know thatsuch oil or gas was stolen or unlawfullyremoved or diverted.

§ 241.61 How will MMS inform me ofviolations without a period to correct?

We will inform you of violationswithout a period to correct by issuing aNotice of Noncompliance explainingwhat the violation is and how to correctit. We also will send you a Notice ofCivil Penalty stating the amount of thepenalty. The Notice of Noncomplianceand Notice of Civil Penalty may beissued simultaneously. We will send theNotice of Noncompliance and theNotice of Civil Penalty to your addressof record under § 241.51(b) using themeans of service specified under§ 241.51(c).

§ 241.62 How may I request a hearing onthe record on a Notice of Noncomplianceregarding violations without a period tocorrect?

You may request a hearing on therecord of a Notice of Noncomplianceregarding violations without a period tocorrect by filing a request within 30days after you receive the Notice ofNoncompliance with the HearingsDivision (Departmental), Office ofHearings and Appeals, U.S. Departmentof the Interior, 4015 Wilson Boulevard,Arlington, Virginia 22203. You may dothis regardless of whether you correctthe violations identified in the Notice ofNoncompliance.

§ 241.63 Does my request for a hearing onthe record affect the penalties?

(a) If you do not correct the violationsidentified in the Notice ofNoncompliance regarding violationswithout a period to correct, thepenalties will continue to accrue even ifyou request a hearing on the record.

(b) You may ask the Hearings Division(Departmental) to stay the accrual ofpenalties pending the hearing on therecord and a decision by the

Administrative Law Judge under§ 241.72.

(1) You must file your petition within45 calendar days after you receive theNotice of Noncompliance.

(2) To stay the accrual of penalties,you must post a bond or other suretyinstrument using the same standardsand requirements as prescribed in 30CFR part 243, subpart B, or demonstratefinancial solvency using the samestandards and requirements asprescribed in 30 CFR part 243, subpartC, for the principal amount of anyunpaid amounts due that are the subjectof the Notice of Noncompliance,including interest thereon, plus theamount of any penalties accrued beforethe date a stay becomes effective.

(3) The Hearings Division will grantor deny the petition under 43 CFR4.21(b).

§ 241.64 May I request a hearing on therecord regarding the amount of a civilpenalty if I did not request a hearing on theNotice of Noncompliance?

(a) You may request a hearing on therecord to challenge only the amount ofa civil penalty when you receive aNotice of Civil Penalty regardingviolations without a period to correct, ifyou did not previously request a hearingon the record under § 241.62. If you didnot request a hearing on the record onthe Notice of Noncompliance under§ 241.62, you may not contest yourunderlying liability for civil penalties.

(b) You must file your request within10 days after you receive Notice of CivilPenalty with the Hearings Division(Departmental), Office of Hearings andAppeals, U.S. Department of theInterior, 4015 Wilson Boulevard,Arlington, Virginia 22203.

General Provisions

§ 241.70 How does MMS decide what theamount of the penalty should be?

We determine the amount of thepenalty by considering the severity ofthe violations, your history ofcompliance, and if you are a smallbusiness.

§ 241.71 Does the penalty affect whether Iowe interest?

(a) The penalties under this part arein addition to interest you may owe onany underlying underpayments orunpaid debt.

(b) If you do not pay the penalty bythe date required under § 241.75(d),MMS will assess you late paymentinterest on the penalty amount at thesame rate interest is assessed under 30CFR 218.54.

§ 241.72 How will the Office of Hearingsand Appeals conduct the hearing on therecord?

If you request a hearing on the recordunder §§ 241.54, 241.56, 241.62 or241.64, the hearing will be conductedby a Departmental Administrative LawJudge from the Office of Hearings andAppeals. After the hearing, theAdministrative Law Judge will issue adecision in accordance with theevidence presented and applicable law.

§ 241.73 How may I appeal theAdministrative Law Judge’s decision?

If you are adversely affected by theAdministrative Law Judge’s decision,you may appeal that decision to theInterior Board of Land Appeals under 43CFR part 4, subpart E.

§ 241.74 May I seek judicial review of thedecision of the Interior Board of LandAppeals?

Under 30 U.S.C. 1719(j), you may seekjudicial review of the decision of theInterior Board of Land Appeals. A suitfor judicial review in the District Courtwill be barred unless filed within 90days after the final order.

§ 241.75 When must I pay the penalty?(a) You must pay the amount of the

Notice of Civil Penalty issued under§§ 241.53 or 241.61, if you do notrequest a hearing on the record under§ 241.54, § 241.56, § 241.62, or § 241.64.

(b) If you request a hearing on therecord under § 241.54, § 241.56,§ 241.62, or § 241.64, but you do notappeal the determination of theAdministrative Law Judge to the InteriorBoard of Land Appeals under § 241.73,you must pay the amount assessed bythe Administrative Law Judge.

(c) If you appeal the determination ofthe Administrative Law Judge to theInterior Board of Land Appeals, youmust pay the amount assessed in theIBLA decision.

(d) You must pay the penalty assessedwithin 40 days after:

(1) You received the Notice of CivilPenalty, if you did not request a hearingon the record under either § 241.54,§ 241.56, § 241.62, or § 241.64;

(2) You received an AdministrativeLaw Judge’s decision under § 241.72, ifyou obtained a stay of the accrual ofpenalties pending the hearing on therecord under § 241.55(b) or § 241.63(b)and did not appeal the AdministrativeLaw Judge’s determination to the IBLAunder § 241.73;

(3) You received an IBLA decisionunder § 241.73 if the IBLA continuedthe stay of accrual of penalties pendingits decision and you did not seekjudicial review of the IBLA’s decision;or



(4) A final non-appealable judgmentof a court of competent jurisdiction isentered, if you sought judicial review ofthe IBLA’s decision and the Departmentor the appropriate court suspendedcompliance with the IBLA’s decisionpending the adjudication of the case.

(e) If you do not pay, that amount issubject to collection under theprovisions of § 241.77.

§ 241.76 Can MMS reduce my penalty onceit is assessed?

Under 30 U.S.C. 1719(g), the Directoror his or her delegate may compromiseor reduce civil penalties assessed underthis part.

§ 241.77 How may MMS collect thepenalty?

(a) MMS may use all available meansto collect the penalty including, but notlimited to:

(1) Requiring the lease surety, foramounts owed by lessees, to pay thepenalty;

(2) Deducting the amount of thepenalty from any sums the United Statesowes to you; and

(3) Using judicial process to compelyour payment under 30 U.S.C. 1719(k).

(b) If the Department uses judicialprocess, or if you seek judicial reviewunder § 241.74 and the court upholdsassessment of a penalty, the court shallhave jurisdiction to award the amountassessed plus interest assessed from thedate of the expiration of the 90-dayperiod referred to in § 241.74. Theamount of any penalty, as finallydetermined, may be deducted from anysum owing to you by the United States.

Criminal Penalties

§ 241.80 May the United States criminallyprosecute me for violations under Federaland Indian oil and gas leases?

If you commit an act for which a civilpenalty is provided at 30 U.S.C. 1719(d)and § 241.60(b), the United States maypursue criminal penalties as provided at30 U.S.C. 1720, in addition to anyauthority for prosecution under otherstatutes.

8. The heading of part 242 is revisedto read as follows.

PART 242—ORDERS [RESERVED]

9. Part 243 is revised to read asfollows:

PART 243—SUSPENSIONS PENDINGAPPEAL AND BONDING—ROYALTYMANAGEMENT PROGRAM

Subpart A—General Provisions

Sec.243.1 What is the purpose of this part?243.2 What leases are subject to this part?

243.3 What definitions apply to this part?243.4 How do I suspend compliance with

an order?243.5 May another person post a bond or

other surety instrument or demonstratefinancial solvency on my behalf?

243.6 When must I or another person meetthe bonding or financial solvencyrequirements under this part?

243.7 What must a person do when postinga bond or other surety instrument ordemonstrating financial solvency onbehalf of an appellant?

243.8 When will MMS suspend myobligation to comply with an order?

243.9 Will MMS continue to suspend myobligation to comply with an order if Iseek judicial review in a Federal court?

243.10 When will MMS collect against abond or other surety instrument or aperson demonstrating financialsolvency?

243.11 May I appeal the MMS bond-approving officer’s determination of mysurety amount or financial solvency?

243.12 May I substitute a demonstration offinancial solvency for a bond postedbefore the effective date of this rule?

Subpart B—Bonding Requirements

243.100 What standards must my MMS-specified surety instrument meet?

243.101 How will MMS determine theamount of my bond or other suretyinstrument?

Subpart C—Financial SolvencyRequirements

243.200 How do I demonstrate financialsolvency?

243.201 How will MMS determine if I amfinancially solvent?

243.202 When will MMS monitor myfinancial solvency?

Authority: 5 U.S.C. 301 et seq.; 25 U.S.C.396 et seq., 396a et seq., 2101 et seq.; 30U.S.C. 181 et seq., 351 et seq., 1001 et seq.,1701 et seq.; 31 U.S.C. 9701; 43 U.S.C. 1301et seq., 1331 et seq., and 1801 et seq.

Subpart A—General Provisions

§ 243.1 What is the purpose of this part?This part applies to you if you are a

lessee or recipient of an order. This partexplains:

(a) How you may suspend compliancewith an order that you (or your designeeif you are a lessee) have appealed under30 CFR part 290 in effect prior to May13, 1999 and contained in the 30 CFR,parts 200 to 699, edition revised as ofJuly 1, 1998, or under 30 CFR part 290,subpart b; and

(b) When you or another person actingon your behalf must submit a bond orother surety or demonstrate financialsolvency.

§ 243.2 What leases are subject to thispart?

This part applies to all Federalmineral leases onshore and on the OuterContinental Shelf (OCS), and to all

federally-administered mineral leaseson Indian tribal and individual Indianmineral owners’ lands.

§ 243.3 What definitions apply to this part?

Assessment means any fee or chargelevied or imposed by the Secretary or adelegated State other than:

(1) The principal amount of anyroyalty, minimum royalty, rental, bonus,net profit share or proceed of sale;

(2) Any interest; or(3) Any civil or criminal penalty.Designee means the person designated

by a lessee under § 218.52 of thischapter to make all or part of the royaltyor other payments due on a lease on thelessee’s behalf.

Lessee means any person to whom theUnited States, or the United States onbehalf of an Indian tribe or individualIndian mineral owner, issues a lease, orany person to whom all or part of thelessee’s interest or operating rights in alease has been assigned.

MMS bond-approving officer meansthe Associate Director for RoyaltyManagement or an official to whom theAssociate Director delegates thatresponsibility.

MMS-specified surety instrumentmeans an MMS-specified administrativeappeal bond, an MMS-specifiedirrevocable letter of credit, a Treasurybook-entry bond or note, or a financialinstitution book-entry certificate ofdeposit.

Notice of order means the notice thatMMS or a delegated State issues to alessee that informs the lessee that MMSor the delegated State has issued anorder to the lessee’s designee.

Order means an order appealableunder 30 CFR part 290 in effect prior toMay 13, 1999 and contained in the 30CFR, parts 200 to 699, edition revised asof July 1, 1998, under 30 CFR part 290subpart B, or under 30 CFR part 208.

Person means any individual, firm,corporation, association, partnership,consortium, or joint venture.

§ 243.4 How do I suspend compliance withan order?

(a) If you timely appeal an order, andif that order or portion of that order:

(1) Requires you to make a payment,and you want to suspend compliancewith that order, you must post a bondor other surety instrument ordemonstrate financial solvency underthis part, except as provided inparagraph (b) of this section; or

(2) Does not require you to make apayment, compliance with that order is



suspended when you meet allrequirements to file that appeal.

(b) You need not meet therequirements of paragraph (a) of thissection if:

(1) The order is an assessment; or(2) Another person agrees to fulfill

these requirements on your behalf under§ 243.5.

§ 243.5 May another person post a bond orother surety instrument or demonstratefinancial solvency on my behalf?

Any other person, including adesignee, payor, or affiliate, may post abond or other surety instrument ordemonstrate financial solvency underthis part on behalf of an appellantrequired to post a bond or other suretyinstrument under § 243.4(a)(1).

§ 243.6 When must I or another personmeet the bonding or financial solvencyrequirements under this part?

If you must meet the bonding orfinancial solvency requirements under§ 243.4(a)(1), or if another person ismeeting your bonding or financialsolvency requirements, then either youor the other person must post a bond orother surety instrument or demonstratefinancial solvency within 60 days afteryou receive the order or the Notice ofOrder.

§ 243.7 What must a person do whenposting a bond or other surety instrumentor demonstrating financial solvency onbehalf of an appellant?

If you assume an appellant’sresponsibility to post a bond or othersurety instrument or demonstratefinancial solvency under § 243.5, you:

(a) Must notify MMS in writing at theaddress specified in § 243.200(a) thatyou are assuming the appellant’sresponsibility under this part;

(b) May not assert that you are nototherwise liable for royalties or otherpayments under 30 U.S.C. 1712(a), orany other theory, as a defense if MMScalls your bond or requires you to paybased on your demonstration offinancial solvency; and

(c) May end your voluntarily-assumedresponsibility for posting a bond orother surety instrument only after theappellant under this part either:

(1) Pays or posts a bond or othersurety instrument; or

(2) Demonstrates financial solvency.

§ 243.8 When will MMS suspend myobligation to comply with an order?

(a) Federal leases. Subject toparagraph (d) of this section, if youappeal an order regarding the paymentand reporting of royalties and otherpayments due from Federal mineralleases onshore or on the OuterContinental Shelf (OCS), and:

(1) If the amount under appeal is lessthan $10,000 or does not requirepayment of a specified amount, MMSwill suspend your obligation to complywith the order. MMS will use the leasesurety posted with the Bureau of LandManagement for onshore leases, andMMS for OCS leases, as collateral forthe obligation; or

(2) If the amount under appeal is$10,000 or more, MMS will suspendyour obligation to comply with thatorder if you:

(i) Submit an MMS-specified suretyinstrument under subpart B of this partwithin a time period MMS prescribes; or

(ii) Demonstrate financial solvencyunder subpart C.

(b) Indian leases. Subject to paragraph(d) of this section, if you appeal an orderregarding the payment and reporting ofroyalties and other payments due fromIndian mineral leases subject to thispart, and:

(1) If the amount under appeal is lessthan $1,000 or does not requirepayment, MMS will suspend yourobligation to comply with the order.MMS will use the lease surety postedwith the Bureau of Indian Affairs ascollateral for the obligation; or

(2) If the amount under appeal is$1,000 or more, MMS will suspend yourobligation to comply with that order ifyou submit an MMS-specified suretyinstrument under subpart B of this partwithin a time period MMS prescribes.

(c) Nothing in this part prohibits youfrom paying any demanded amount orcomplying with any other requirementpending appeal. However, voluntarilypaying any demanded amount orotherwise complying with any otherrequirement when suspension of anorder is otherwise available under theserules does not create judiciallyreviewable final agency action under 5U.S.C. 704.

(d) Regardless of the amount underappeal, MMS may inform you that itwill not suspend your obligation tocomply with the order under paragraph(a) or (b) of this section becausesuspension would harm the interests ofthe United States or the Indian lessor.

§ 243.9 Will MMS continue to suspend myobligation to comply with an order if I seekjudicial review in a Federal court?

(a) If you seek judicial review of anIBLA decision or other final action ofthe Department of the Interior regardingan order, MMS will suspend yourobligation to comply with that orderpending judicial review if you continueto meet the requirements of this part.

(b) Notwithstanding the provisions ofparagraph (a) of this section, MMS maydecide that it will not suspend your

obligation to comply with an order.MMS will notify you in writing of thatdecision and the reasons for it.

§ 243.10 When will MMS collect against abond or other surety instrument or a persondemonstrating financial solvency?

(a) This section applies to you if, foran appeal of an order under this part,you:

(1) Maintain a bond or an MMS-specified surety instrument on yourown behalf or for another person; or

(2) Have demonstrated financialsolvency on your own behalf or foranother person.

(b) MMS may initiate collectionagainst the bond or other suretyinstrument or the person demonstratingfinancial solvency:

(1) If the MMS Director or the DeputyCommissioner of Indian Affairs decidesyour appeal adversely to you and youdo not pay the amount due or appealthat decision to the IBLA under 43 CFRpart 4, subpart E;

(2) If the IBLA, the Director of theOffice of Hearings and Appeals, anAssistant Secretary, or the Secretarydecides your appeal adversely to you,and you do not pay the amount due orpursue judicial review within 90 days ofthe decision;

(3) If a court of competent jurisdictionissues a final non-appealable decisionadverse to you, and you do not pay theamount due within 30 days of thedecision;

(4) If you do not increase the amountof your bond or other surety instrumentas required under § 243.101(b), orotherwise fail to maintain an adequatesurety instrument in effect, and you donot pay the amount due under the orderwithin 30 days of notice from MMSunder § 243.101(b);

(5) If the obligation to comply with anorder or decision is not suspendedunder § 243.8 or § 243.9 and you do notpay the amount required under theorder or decision; or

(6) If the MMS bond-approving officerdetermines that you are no longerfinancially solvent under § 243.202(c),and you do not pay the order amount orpost a bond or other MMS-specifiedsurety instrument under subpart Bwithin 30 days of that determination.

§ 243.11 May I appeal the MMS bond-approving officer’s determination of mysurety amount or financial solvency?

Any decision on your surety amountunder subpart B or your financialsolvency under subpart C is final and isnot subject to appeal.



§ 243.12 May I substitute a demonstrationof financial solvency for a bond postedbefore the effective date of this rule?

If you appealed an order before June14, 1999 and you submitted an MMS-specified surety instrument to suspendcompliance with that order, you mayreplace the surety with a demonstrationof financial solvency under this part atan administratively convenient time,such as when the surety instrument isdue for renewal.

Subpart B—Bonding Requirements

§ 243.100 What standards must my MMS-specified surety instrument meet?

(a) An MMS-specified suretyinstrument must be in a form specifiedin MMS instructions. MMS will giveyou written information and standardforms for MMS-specified suretyinstrument requirements.

(b) MMS will use a bank-ratingservice to determine whether a financialinstitution has an acceptable rating toprovide a surety instrument adequate toindemnify the lessor from loss ordamage.

(1) Administrative appeal bonds mustbe issued by a qualified surety companywhich the Department of the Treasuryhas approved.

(2) Irrevocable letters of credit orcertificates of deposit must be from afinancial institution acceptable to MMSwith a minimum 1-year period ofcoverage subject to automatic renewalup to 5 years.

§ 243.101 How will MMS determine theamount of my bond or other suretyinstrument?

(a) The MMS bond-approving officermay approve your surety if he or shedetermines that the amount is adequateto guarantee payment. The amount ofyour surety may vary depending on theform of the surety and how long thesurety is effective.

(1) The amount of the MMS-specifiedsurety instrument must include theprincipal amount owed under the orderplus any accrued interest we determineis owed plus projected interest for a 1-year period.

(2) Treasury book-entry bond or noteamounts must be equal to at least 120percent of the required surety amount.

(b) If your appeal is not decidedwithin 1 year from the filing date, youmust increase the surety amount tocover additional estimated interest foranother 1-year period. You mustcontinue to do this annually on the dateyour appeal was filed. We willdetermine the additional estimatedinterest and notify you of the amount soyou can amend your surety instrument.

(c) You may submit a single suretyinstrument that covers multiple appeals.You may change the instrument to addnew amounts under appeal or removeamounts that have been adjudicated inyour favor or that you have paid if you:

(1) Amend the single suretyinstrument annually on the date youfiled your first appeal; and

(2) Submit a separate suretyinstrument for new amounts underappeal until you amend the instrumentto cover the new appeals.

Subpart C—Financial SolvencyRequirements

§ 243.200 How do I demonstrate financialsolvency?

(a) To demonstrate financial solvencyunder this part, you must submit anaudited consolidated balance sheet, and,if requested by the MMS bond-approving officer, up to 3 years of taxreturns to the MMS, Debt CollectionSection using:

(1) The U.S. Postal Service or privatedelivery at P.O. Box 5760, MS 3031,Denver, CO 80217–5760; or

(2) Courier or overnight delivery atMS 3031, Denver Federal Center, Bldg.85, Room A–212, Denver, CO 80225–0165.

(b) You must submit an auditedconsolidated balance sheet annually,and, if requested, additional annual taxreturns on the date MMS firstdetermined that you demonstratedfinancial solvency as long as you haveactive appeals, or whenever MMSrequests.

(c) If you demonstrate financialsolvency in the current calendar year,you are not required to redemonstratefinancial solvency for new appeals oforders during that calendar year unlessyou file for protection under anyprovision of the U.S. Bankruptcy Code(Title 11 of the United States Code), orMMS notifies you that you mustredemonstrate financial solvency.

§ 243.201 How will MMS determine if I amfinancially solvent?

(a) The MMS bond-approving officerwill determine your financial solvencyby examining your total net worth,including, as appropriate, the net worthof your affiliated entities.

(b) If your net worth, minus theamount we would require as suretyunder subpart B for all orders you haveappealed is greater than $300 million,you are presumptively deemedfinancially solvent, and we will notrequire you to post a bond or othersurety instrument.

(c) If your net worth, minus theamount we would require as surety

under subpart B for all orders you haveappealed is less than $300 million, youmust submit the following to the MMSDebt Collection Section by one of themethods in § 243.200(a):

(1) A written request asking us toconsult a business-information, orcredit-reporting service or program todetermine your financial solvency; and

(2) A nonrefundable $50 processingfee:

(i) You must pay the processing fee tous following the requirements formaking payments found in 30 CFR218.51. You are not required to useElectronic Funds Transfer (EFT) forthese payments;

(ii) You must submit the fee with yourrequest under paragraph (c)(1) of thissection, and then annually on the datewe first determined that youdemonstrated financial solvency, aslong as you are not able to demonstratefinancial solvency under paragraph (a)of this section and you have activeappeals.

(d) If you request that we consult abusiness-information or credit-reportingservice or program under paragraph (c)of this section:

(1) We will use criteria similar to thatwhich a potential creditor would use tolend an amount equal to the bond orother surety instrument we wouldrequire under subpart B;

(2) For us to consider you financiallysolvent, the business-information orcredit-reporting service or program mustdemonstrate your degree of risk as lowto moderate:

(i) If our bond-approving officerdetermines that the business-information or credit-reporting serviceor program information demonstratesyour financial solvency to oursatisfaction, our bond-approving officerwill not require you to post a bond orother surety instrument under subpartB;

(ii) If our bond-approving officerdetermines that the business-information or credit-reporting serviceor program information does notdemonstrate your financial solvency toour satisfaction, our bond-approvingofficer will require you to post a bondor other surety instrument undersubpart B or pay the obligation.

§ 243.202 When will MMS monitor myfinancial solvency?

(a) If you are presumptivelyfinancially solvent under § 243.201(b),MMS will determine your net worth asdescribed under §§ 243.201(b) and (c) toevaluate your financial solvency at leastannually on the date we firstdetermined that you demonstratedfinancial solvency as long as you have



active appeals and each time you appeala new order.

(b) If you ask us to consult a business-information or credit-reporting serviceor program under § 243.201(c), we willconsult a service or program annually aslong as you have active appeals andeach time you appeal a new order.

(c) If our bond-approving officerdetermines that you are no longerfinancially solvent, you must post abond or other MMS-specified suretyinstrument under subpart B.

PART 250—OIL AND GAS ANDSULPHUR OPERATIONS IN THEOUTER CONTINENTAL SHELF


Authority: 43 U.S.C. 1331, et seq.

10a. Section 250.1409 is revised toread as follows:

§ 250.1409 What are my appeal rights?(a) When you receive the Reviewing

Officer’s final decision, you have 60days to either pay the penalty or file anappeal in accordance with 30 CFR part290, subpart A.

(b) If you file an appeal, you musteither:

(1) Submit a surety bond in theamount of the penalty to the RegionalAdjudication Office in the Region wherethe penalty was assessed, followinginstructions that the Reviewing Officerwill include in the final decision; or

(2) Notify the Regional AdjudicationOffice, in the Region where the penaltywas assessed, that you want your lease-specific/area-wide bond on file to beused as the bond for the penaltyamount.

(c) If you choose the alternative inparagraph (b)(2) of this section, theRegional Director may requireadditional security (i.e., security inexcess of your existing bond) to ensuresufficient coverage during an appeal. Inthat event, the Regional Director willrequire you to post the supplementalbond with the regional office in thesame manner as under §§ 256.53(d)through (f) of this chapter. If theRegional Director determines the appealshould be covered by a lease-specificabandonment account then you mustestablish an account that meets therequirements of § 256.56.

(d) If you do not either pay thepenalty or file a timely appeal, MMSwill take one or more of the followingactions:

(1) We will collect the amount youwere assessed, plus interest, latepayment charges, and other fees asprovided by law, from the date youreceived the Reviewing Officer’s final

decision until the date we receivepayment;

(2) We may initiate additionalenforcement, including, if appropriate,cancellation of the lease, right-of-way,license, permit, or approval, or theforfeiture of a bond under this part; or

(3) We may bar you from doingfurther business with the FederalGovernment according to ExecutiveOrders 12549 and 12689, and section2455 of the Federal AcquisitionStreamlining Act of 1994, 31 U.S.C.6101. The Department of the Interior’sregulations implementing theseauthorities are found at 43 CFR part 62,subpart D.

11. Part 290 of subchapter C is revisedto read as follows:

PART 290—APPEAL PROCEDURES

Subpart A—Offshore Minerals ManagementAppeal Procedures

Sec.290.1 What is the purpose of this subpart?290.2 Who may appeal?290.3 What is the time limit for filing an

appeal?290.4 How do I file an appeal?290.5 Can I obtain an extension for filing

my Notice of Appeal?290.6 Are informal resolutions permitted?290.7 Do I have to comply with the decision

or order while my appeal is pending?290.8 How do I exhaust my administrative

remedies?

Subpart B—Appeals of RoyaltyManagement Program and Delegated StateOrders

290.100 What is the purpose of thissubpart?

290.101 What leases are subject to thissubpart?

290.102 What definitions apply to thissubpart?

290.103 Who may file an appeal?290.104 What may I not appeal under this

subpart?290.105 How do I appeal an order?290.106 How do lessees join a designee’s

appeal and how does joinder affect theappeal?

290.107 Where are the rules concerning theeffect of the Department not issuing adecision in my appeal within thestatutory time frame?

290.108 How do I appeal to the IBLA?290.109 How do I request an extension of

time?Authority: 5 U.S.C. 301 et seq.; 43 U.S.C.

1331 et seq.

Subpart A—Offshore MineralsManagement Appeal Procedures

§ 290.1 What is the purpose of thissubpart?

The purpose of this subpart is toexplain the procedures for appeals ofMinerals Management Service (MMS)Offshore Minerals Management (OMM)

decisions and orders issued undersubchapter B.

§ 290.2 Who may appeal?

If you are adversely affected by anOMM official’s final decision or orderissued under 30 CFR chapter II,subchapter B, you may appeal thatdecision or order to the Interior Boardof Land Appeals (IBLA). Your appealmust conform with the proceduresfound in this subpart and 43 CFR part4, subpart E. A request forreconsideration of an MMS decisionconcerning a lease bid, authorized in 30CFR 256.47(e)(3) and 281.21(a)(1), or adeep water field determination,authorized in 30 CFR 203.79(a) and 30CFR 260.110(d)(2), is not subject to theprocedures found in this part.

§ 290.3 What is the time limit for filing anappeal?

You must file your appeal within 60days after you receive OMM’s finaldecision or order. The 60-day timeperiod applies rather than the timeperiod provided in 43 CFR 4.411(a). Adecision or order is received on the dateyou sign a receipt confirming deliveryor, if there is no receipt, the dateotherwise documented.

§ 290.4 How do I file an appeal?

For your appeal to be filed, MMSmust receive all of the following within60 days after you receive the decision ororder:

(a) A written Notice of Appealtogether with a copy of the decision ororder you are appealing in the office ofthe OMM officer that issued thedecision or order. You cannot extendthe 60-day period for that office toreceive your Notice of Appeal; and

(b) A nonrefundable processing fee of$150 paid with the Notice of Appeal.

(1) Identify the order you areappealing on the check or other form ofpayment you use to pay the processingfee.

(2) You cannot extend the 60-dayperiod for payment of the processingfee.

(3) You must pay the processing feeto MMS following the requirements formaking payments found in 30 CFR218.51. You are not required to useElectronic Funds Transfer (EFT) forthese payments.

§ 290.5 Can I obtain an extension for filingmy Notice of Appeal?

You cannot obtain an extension oftime to file the Notice of Appeal. See 43CFR 4.411(c).



§ 290.6 Are informal resolutionspermitted?

(a) You may seek informal resolutionwith the issuing officer’s next levelsupervisor during the 60-day periodestablished in § 290.3.

(b) Nothing in this subpart precludesresolution by settlement of any appealor matter pending in the administrativeprocess after the 60-day periodestablished in § 290.3.

§ 290.7 Do I have to comply with thedecision or order while my appeal ispending?

(a) The decision or order is effectiveduring the 60-day period for filing anappeal under § 290.3 unless:

(1) OMM notifies you that thedecision or order, or some portion of it,is suspended during this period becausethere is no likelihood of immediate andirreparable harm to human life, theenvironment, any mineral deposit, orproperty; or

(2) You post a surety bond under 30CFR 250.1409 pending the appealchallenging an order to pay a civilpenalty.

(b) This section applies rather than 43CFR 4.21(a) for appeals of OMM orders.

(c) After you file your appeal, IBLAmay grant a stay of a decision or orderunder 43 CFR 4.21(b); however, adecision or order remains in effect untilIBLA grants your request for a stay ofthe decision or order under appeal.

§ 290.8 How do I exhaust myadministrative remedies?

(a) If you receive a decision or orderissued under chapter II, subchapter B,you must appeal that decision or orderto IBLA under 43 CFR part 4, subpart Eto exhaust administrative remedies.

(b) This section does not apply if theAssistant Secretary for Land andMinerals Management or the IBLAmakes a decision or order immediatelyeffective notwithstanding an appeal.

Subpart B—Appeals of RoyaltyManagement Program and DelegatedStates Orders


This subpart tells you how to appealMinerals Management Service (MMS) ordelegated State orders concerningreporting to the MMS RoyaltyManagement Program (RMP) and thepayment of royalties and otherpayments due under leases subject tothis subpart.

§ 290.101 What leases are subject to thissubpart?

This subpart applies to:

(a) All Federal mineral leases onshoreand on the Outer Continental Shelf(OCS); and

(b) All federally-administered mineralleases on Indian tribal and individualIndian mineral owners’ lands, regardlessof the statutory authority under whichthe lease was issued or maintained.


Assessment means any fee or chargelevied or imposed by the Secretary or adelegated State other than:


(2) Any interest; or(3) Any civil or criminal penalty.Delegated State means a State to

which MMS has delegated authority toperform royalty management functionsunder an agreement or agreementsunder regulations at 30 CFR part 227.

Designee means the person designatedby a lessee under 30 CFR 218.52 tomake all or part of the royalty or otherpayments due on a lease on the lessee’sbehalf.

IBLA means the Interior Board ofLand Appeals.

Indian lessor means an Indian tribe orindividual Indian mineral owner with abeneficial or restricted interest in aproperty that is subject to a lease issuedor administered by the Secretary onbehalf of the tribe or individual Indianmineral owner.

Lease means any agreementauthorizing exploration for or extractionof any mineral, regardless of whetherthe instrument is expresslydenominated as a ‘‘lease,’’ includingany:

(1) Contract;(2) Net profit share arrangement;(3) Joint venture; or(4) Agreement the Secretary approves

under the Indian Mineral DevelopmentAct, 25 U.S.C. 2101 et seq.

Lessee means any person to whom theUnited States, or the United States onbehalf of an Indian tribe or individualIndian mineral owner, issues a leasesubject to this subpart, or any person towhom all or part of the lessee’s interestor operating rights in a lease subject tothis subpart has been assigned.

Notice of Order means the notice thatMMS or a delegated State issues to alessee that informs the lessee that MMSor the delegated State has issued anorder to the lessee’s designee.

Obligation means:(1) A lessee’s, designee’s or payor’s

duty to:(i) Deliver oil or gas royalty in kind;

or(ii) Make a lease-related payment,

including royalty, minimum royalty,

rental, bonus, net profit share, proceedsof 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, includingroyalty, minimum royalty, rental, bonus,net profit share, proceeds of sale, orinterest.

(3) The obligations identified inparagraphs (1)(i) and (2)(i) of thisdefinition are nonmonetary obligations.The obligations identified in paragraphs(1)(ii) and (2)(ii), including therequirement to compute the amount ofsuch obligations, are monetaryobligations.

Order for purposes of this subpartonly, means any document issued bythe MMS Director, MMS RMP, or adelegated State that contains mandatoryor ordering language that requires therecipient to do any of the following forany lease subject to this subpart: report,compute, or pay royalties or otherobligations, report production, orprovide other information.

(1) Order includes:(i) An order to pay or to compute and

pay; and(ii) An MMS or delegated State

decision to deny a lessee’s, designee’s,or payor’s written request that asserts anobligation due the lessee, designee orpayor.

(2) Order does not include:(i) A non-binding request,

information, or guidance, such as:(A) Advice or guidance on how to

report or pay, including a valuationdetermination, unless it containsmandatory or ordering language; and

(B) A policy determination;(ii) A subpoena;(iii) An order to pay that MMS issues

to a refiner or other person involved indisposition of royalty taken in kind; or

(iv) A Notice of Noncompliance or aNotice of Civil Penalty issued under 30U.S.C. 1719 and 30 CFR part 241, or adecision of an administrative law judgeor of the IBLA following a hearing onthe record on a Notice ofNoncompliance or Notice of CivilPenalty.

Party means MMS, any person whofiles a Notice of Appeal, and any personwho files a Notice of Joinder in anappeal under this subpart.

§ 290.103 Who may file an appeal?(a) If you receive an order that

adversely affects you or your lessee, youmay appeal that order except asprovided under § 290.104.

(b) If you are a lessee and you receivea Notice of Order, and if you contest theorder, you may either appeal the order



or join in your designee’s appeal under§ 290.106.

§ 290.104 What may I not appeal under thissubpart?

You may not appeal:(a) An action that is not an order, as

defined in this subpart; or(b) A determination of the surety

amount or financial solvency under 30CFR part 243, subparts B or C.

§ 290.105 How do I appeal an order?

(a) You may appeal an order to theDirector, Minerals Management Service(MMS Director), by filing a Notice ofAppeal in the office of the officialissuing the order within 30 days fromservice of the order.

(1) Within the same 30-day period,you must file in the office of the officialissuing the order a statement of reasonsor written arguments or briefs thatinclude the arguments on the facts orlaws that you believe justify reversal ormodification of the order.

(2) If you are a designee, when youfile your Notice of Appeal you mustserve your Notice of Appeal on thelessees for the leases in the order youappealed.

(b) You may not request and will notreceive an extension of time for filingthe Notice of Appeal.

(c) If the office of the official issuingthe order does not receive the Notice ofAppeal within the time provided inparagraph (a) of this section, the Noticeof Appeal will be considered timely ifthe office of the official issuing the orderreceives:

(1) The Notice of Appeal not laterthan 10 days after the required filingdate; and

(2) The officer with whom the Noticeof Appeal must be filed determines thatthe Notice of Appeal was transmitted tothe proper office before the filingdeadline in paragraph (a) of this section.

(d) If the Notice of Appeal is filedafter the grace period provided inparagraph (c) of this section and was nottransmitted to the proper office beforethe filing deadline in paragraph (a) ofthis section, the MMS Director will notconsider the Notice of Appeal and thecase will be closed.

(e) The officer with whom the Noticeof Appeal is filed will send the appealand accompanying papers to the MMSDirector.

(f) The MMS Director will review therecord and render a decision in the case.

(g) If an order involves Indian leases,the Deputy Commissioner of IndianAffairs will exercise the functionsvested in the MMS Director.

§ 290.106 How do lessees join adesignee’s appeal and how does joinderaffect the appeal?

(a) If you are a lessee, and yourdesignee files an appeal under§ 290.103, you may join in that appealwithin 30 days after you receive yourdesignee’s Notice of Appeal under§ 290.105(a)(2) by filing a Notice ofJoinder with the office or official thatissued the order.

(b) If you join in an appeal underparagraph (a) of this section, you aredeemed to appeal the order jointly withthe designee, but the designee mustfulfill all requirements imposed onappellants under this subpart and 43CFR part 4, subparts E and J. You maynot file submissions or pleadingsseparately from the designee.

(c) If you are a lessee and you neitherappeal nor join in your designee’sappeal under this section, yourdesignee’s actions with respect to theappeal and any decisions in the appealbind you.

(d) If you are a designee and youdecide to discontinue participation inthe appeal, you must serve writtennotice within 30 days before the nextsubmission or pleading is due on:

(1) All lessees who have joined in theappeal under paragraph (a) of thissection;

(2) The office or officer with whomany subsequent submissions orpleadings must be filed, including theIBLA; and

(3) All other parties to the appeal.(e) If you have joined in the appeal

under paragraph (a) of this section, andif the designee notifies you underparagraph (d) of this section that itdeclines to further pursue the appeal,you become an appellant and must thenmeet all requirements of this subpartand 43 CFR part 4, subparts E and J, asthe appellant.

§ 290.107 Where are the rules concerningthe effect of the Department not issuing adecision in my appeal within the statutorytime frame?

If your appeal involves monetary ornonmonetary obligations under Federaloil and gas leases, the rules concerningthe effect of the Department not issuinga final decision in your appeal withinthe 33-month period prescribed under30 U.S.C. 1724(h) are located in 43 CFRpart 4, subpart J.

§ 290.108 How do I appeal to the IBLA?Any party to a case adversely affected

by a final decision of the MMS Directoror the Deputy Commissioner of IndianAffairs under this subpart shall have aright of appeal to the IBLA under theprocedures provided in 43 CFR part 4,subpart E.

§ 290.109 How do I request an extension oftime?

(a) If you are a party to an appealunder this subpart, and you needadditional time after the appealcommences under 43 CFR 4.904 for anypurpose:

(1) You may obtain an extension oftime under this section; and

(2) You must submit a written requestfor an extension of time to:

(i) The office or official with whomyou must file a document before therequired filing date; or

(ii) If you are not seeking an extensionof time to file a document, to the officeor official before whom the appeal ispending.

(b) If you are an appellant, and if yourappeal involves monetary ornonmonetary obligations under Federaloil and gas leases, you must agree inwriting in your request to extend theperiod in which the Department mustissue a final decision in your appealunder 30 U.S.C. 1724(h) and 43 CFR4.906, by the amount of time for whichyou are requesting an extension.

(c) If you are any other party to anappeal involving monetary ornonmonetary obligations under Federaloil and gas leases, the office or officialwith whom you must file the requestmay require you to submit a writtenagreement signed by the appellant toextend the period in which theDepartment must issue a final decisionin the appeal under 43 CFR 4.906, bythe amount of time for which you arerequesting an extension.

(d) The office or official with whomyou must file your request may declineany request for an extension of time.

(e) You must serve your request on allparties to the appeal.

43 CFR PART 4—DEPARTMENTHEARINGS AND APPEALSPROCEDURES


Authority: R.S. 2478, as amended, 43U.S.C. sec. 1201, unless otherwise noted.

14. In 43 CFR part 4, subpart J isadded to read as follows.

Subpart J—Special Rules Applicable toAppeals Concerning Federal Oil and GasRoyalties and Related Matters

4.901 What is the purpose of this subpart?4.902 What appeals are subject to this

subpart?4.903 What definitions apply to this

subpart?4.904 When does my appeal commence and

end?4.905 What if a due date falls on a day the

Department or relevant office is not openfor business?



4.906 What if the Department does notissue a decision by the date my appealends?

4.907 What if an IBLA decision requiresMMS or a delegated State to recalculateroyalties or other payments?

4.908 What is the administrative record formy appeal if it is deemed decided?

4.909 How do I request an extension oftime?

Authority: 5 U.S.C. 301 et seq.; 25 U.S.C.396 et seq., 396a et seq., 2101 et seq.; 30U.S.C. 181 et seq., 351 et seq., 1001 et seq.,1701 et seq.; 31 U.S.C 9701; 43 U.S.C. 1301et seq., 1331 et seq., and 1801 et seq.

Subpart J—Special Rules Applicable toAppeals Concerning Federal Oil andGas Royalties and Related Matters


This subpart tells you how the timelimits of 30 U.S.C. 1724(h) apply toappeals subject to this subpart.

§ 4.902 What appeals are subject to thissubpart?

(a) This subpart applies to appealsunder 30 CFR part 290 in effect prior toMay 13, 1999 and contained in the 30CFR, parts 200 to 699, edition revised asof July 1, 1998, 30 CFR part 290 subpartB, and 43 CFR part 4, subpart E, ofMinerals Management Service (MMS) ordelegated State orders or portions oforders concerning payment (orcomputation and payment) of royaltiesand other payments due, and delivery ortaking of royalty in kind, under Federaloil and gas leases.

(b) This subpart does not apply toappeals of orders, or portions of orders,that

(1) Involve Indian leases or Federalleases for minerals other than oil andgas; or

(2) Relate to Federal oil and gas leasesbut do not involve a monetary ornonmonetary obligation.


For the purposes of this subpart only:Assessment means any fee or charge

levied or imposed by the Secretary or adelegated State other than:


(2) Any interest; or(3) Any civil or criminal penalty.Delegated State means a State to

which MMS has delegated authority toperform royalty management functionsunder an agreement or agreementsunder 30 CFR part 227.

Designee means the person designatedby a lessee under 30 CFR 218.52 tomake all or part of the royalty or other

payments due on a lease on the lessee’sbehalf.

IBLA means the Interior Board ofLand Appeals.

Lease means any agreementauthorizing exploration for or extractionof any mineral, regardless of whetherthe instrument is expresslydenominated as a ‘‘lease,’’ includingany:

(1) Contract;(2) Net profit share arrangement; or(3) Joint venture.Lessee means any person to whom the

United States issues a Federal oil andgas lease, or any person to whom all orpart of the lessee’s interest or operatingrights in a Federal oil and gas lease hasbeen assigned.

Monetary obligation means a lessee’s,designee’s or payor’s duty to pay, or tocompute and pay, any obligation in anyorder, or the Secretary’s duty to pay,refund, offset, or credit the amount ofany obligation that is the subject of adecision by the MMS or a delegatedState denying a lessee’s, designee’s, orpayor’s written request for the payment,refund, offset, or credit. To determinethe amount of any monetary obligation,for purposes of the default rule ofdecision in § 4.906 and 30 U.S.C.1724(h):

(1) If an order asserts a monetaryobligation arising from one issue or typeof underpayment that covers multipleleases or production months, the totalobligation for all leases or productionmonths involved constitutes a singlemonetary obligation;

(2) If an order asserts monetaryobligations arising from different issuesor types of underpayments for one ormore leases, the obligations arising fromeach separate issue, subject to paragraph(1) of this definition, constitute separatemonetary obligations; and

(3) If an order asserts a monetaryobligation with a stated amount ofadditional royalties due, plus an orderto perform a restructured accountingarising from the same issue or cause asthe specifically stated underpayment,the stated amount of royalties due plusthe estimated amount due under therestructured accounting, subject toparagraphs (1) and (2) of this definition,together constitutes a single monetaryobligation.

Nonmonetary obligation means anyduty of a lessee or its designee to deliveroil or gas in kind, or any duty of theSecretary to take oil or gas royalty inkind.

Notice of Order means the notice thatMMS or a delegated State issues to alessee that informs the lessee that MMSor the delegated State has issued anorder to the lessee’s designee.

Obligation means:(1) A lessee’s, designee’s or payor’s

duty to:(i) Deliver oil or gas royalty in kind;

or(ii) Make a lease-related payment,

including royalty, minimum royalty,rental, bonus, net profit share, proceedsof 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, includingroyalty, minimum royalty, rental, bonus,net profit share, proceeds of sale, orinterest.

Order means any document or portionof a document issued by the MMSDirector, MMS RMP, or a delegatedState, that contains mandatory orordering language regarding anymonetary or nonmonetary obligationunder any Federal oil and gas lease orleases.

(1) Order includes but is not limitedto the following:

(i) An order to pay;(ii) A MMS or delegated State

decision to deny a lessee’s, designee’s,or payor’s written request that asserts anobligation due the lessee, designee orpayor.

(2) Order does not include:(i) A non-binding request,

information, or guidance, such as:(A) Advice or guidance on how to

report or pay, including valuationdetermination, unless it containsmandatory or ordering language; and

(B) A policy determination;(ii) A subpoena;(iii) An order to pay that MMS issues

to a refiner or other person involved indisposition of royalty taken in kind; or

(iv) a Notice of Noncompliance or aNotice of Civil Penalty issued under 30U.S.C. 1719 and 30 CFR part 241, or adecision of an administrative law judgeor of the IBLA following a hearing onthe record on a Notice ofNoncompliance or Notice of CivilPenalty.

Party means MMS, any person whofiles a Notice of Appeal under 30 CFRpart 290 in effect prior to May 13, 1999and contained in the 30 CFR, parts 200to 699, edition revised as of July 1, 1998,30 CFR part 290 subpart B, or 43 CFRpart 4, subpart E, and any person whofiles a Notice of Joinder in an appealunder 30 CFR part 290, subpart B.

Payor means any person responsiblefor reporting and paying royalties forFederal oil and gas leases for productionbefore September 1, 1996.



§ 4.904 When does my appeal commenceand end?

For purposes of the period in whichthe Department must issue a finaldecision in your appeal under § 4.906:

(a) If you filed your Notice of Appealand initial Statement of Reasons withMMS before August 13, 1996, yourappeal commenced on August 13, 1996;

(b) If you filed your Notice of Appealor initial Statement of Reasons withMMS after August 13, 1996, under 30CFR part 290, in effect prior to May 13,1999 and contained in the 30 CFR, parts200 to 699, edition, revised as of July 1,1998, your appeal commenced on thedate MMS received your Notice ofAppeal, or if later, the date MMSreceived your initial Statement ofReasons;

(c) If you filed your Notice of Appealunder 30 CFR part 290, subpart B, yourappeal commenced on the date MMSreceived your Notice of Appeal.

(d) Your appeal ends on the same dayof the month of the 33rd calendar monthafter your appeal commenced underparagraph (a), (b), or (c) of this section,plus the number of days of anyapplicable time extensions under§ 4.909 or 30 CFR 290.109. If the 33rdcalendar month after your appealcommenced does not have the same dayof the month as the day of the monthyour appeal commenced, then the initial33-month period ends on the last day ofthe 33rd calendar month.

§ 4.905 What if a due date falls on a daythe Department or relevant office is notopen for business?

If a due date under this subpart fallson a day the relevant office is not openfor business (such as a weekend, Federalholiday, or shutdown), the due date isthe next day the relevant office is openfor business.

§ 4.906 What if the Department does notissue a decision by the date my appealends?

(a) If the IBLA or an AssistantSecretary (or the Secretary or theDirector of OHA) does not issue a finaldecision by the date an appeal endsunder § 4.904(d), then under 30 U.S.C.1724(h)(2), the Secretary will be deemedto have decided the appeal:

(1) In favor of the appellant for anynonmonetary obligation at issue in theappeal, or any monetary obligation atissue in the appeal with a principalamount of less than $10,000;

(2) In favor of the Secretary for anymonetary obligation at issue in theappeal with a principal amount of$10,000 or more.

(b)(1) If your appeal ends before theMMS Director issues a decision in your

appeal, then the provisions of paragraph(a) of this section apply to the monetaryand nonmonetary obligations in theorder that you contested in your appealto the Director.

(2) If the MMS Director issues adecision in your appeal before yourappeal ends, and if you appealed theDirector’s decision to IBLA under 43CFR part 4, subpart E, then theprovisions of paragraph (a) of thissection apply to the monetary andnonmonetary obligations in theDirector’s decision that you contested inyour appeal to IBLA.

(3) If the MMS Director issues adecision in your appeal, and if you didnot appeal the Director’s decision toIBLA within the time required under 30CFR part 290 in effect prior to May 13,1999 and contained in the 30 CFR, parts200 to 699, edition revised as of July 1,1998 (for appeals filed before May 13,1999 or 30 CFR part 290 subpart B (forappeals filed on or after May 13, 1999and 43 CFR part 4, subpart E, then theMMS Director’s decision is the finaldecision of the Department and 30U.S.C. 1724(h)(2) has no application.

(c) If the IBLA issues a decision beforethe date your appeal ends, that decisionis the final decision of the Departmentand 30 U.S.C. 1724(h)(2) has noapplication. A petition forreconsideration does not extend orrenew the 33-month period.

(d) If any part of the principal amountof any monetary obligation is notspecifically stated in an order or MMSDirector’s decision and must becomputed to comply with the order orMMS Director’s decision, then theprincipal amount referred to inparagraph (a) of this section means theprincipal amount MMS estimates youwould be required to pay as a result ofthe computation required under theorder, plus any amount due stated in theorder.

§ 4.907 What if an IBLA decision requiresMMS or a delegated State to recalculateroyalties or other payments?

(a) An IBLA decision modifying anorder or an MMS Director’s decisionand requiring MMS or a delegated Stateto recalculate royalties or otherpayments is a final decision in theadministrative proceeding for purposesof 30 U.S.C. 1724(h).

(b) MMS or the delegated State mustprovide to IBLA and all parties anyrecalculation IBLA requires underparagraph (a) of this section within 60days of receiving IBLA’s decision.

(c) There is no further appeal withinthe Department from MMS’s or theState’s recalculation under paragraph (b)of this section.

(d) The IBLA decision issued underparagraph (a) of this section togetherwith recalculation under paragraph (b)of this section are the final action of theDepartment that is judicially reviewableunder 5 U.S.C. 704.

§ 4.908 What is the administrative recordfor my appeal if it is deemed decided?

If your appeal is deemed decidedunder § 4.906, the record for yourappeal consists of:

(a) The record established in anappeal before the MMS Director;

(b) Any additional correspondence orsubmissions to the MMS Director;

(c) The MMS Director’s decision in anappeal;

(d) Any pleadings or submissions tothe IBLA; and

(e) Any IBLA orders and decisions.

§ 4.909 How do I request an extension oftime?

(a) If you are a party to an appealsubject to this subpart before the IBLA,and you need additional time after anappeal commences for any purpose, youmay obtain an extension of time underthis section.

(b) You must submit a written requestfor an extension of time before therequired filing date.

(1) You must submit your request tothe IBLA at Interior Board of LandAppeals, 4015 Wilson Boulevard,Arlington, Virginia 22203, using theU.S. Postal Service, a private delivery orcourier service, hand delivery or telefaxto (703) 235–8349;

(2) If you file a document by telefax,you must send an additional copy ofyour document to the IBLA using theU.S. Postal Service, a private delivery orcourier service or hand delivery so thatit is received within 5 business days ofyour telefax transmission.

(c) If you are an appellant, in additionto meeting the requirements ofparagraph (b) of this section, you mustagree in writing in your request toextend the period in which theDepartment must issue a final decisionin your appeal under § 4.906 by theamount of time for which you arerequesting an extension.

(d) If you are any other party, theIBLA may require you to submit awritten agreement signed by theappellant to extend the period in whichthe Department must issue a finaldecision in the appeal under § 4.906 bythe amount of time for which you arerequesting an extension.

(e) The IBLA has the discretion todecline any request for an extension oftime.



(f) You must serve your request on allparties to the appeal.

[FR Doc. 99–11816 Filed 5–12–99; 8:45 am]BILLING CODE 4310–MR–P


Documents

64 FR 26240 1999-05-13 · 21, 1999). Those attending included representatives of natural gas, oil, and coal producers, including representatives both of large integrated producers