Supplemental Guidance on Processing Royalty Rate Reduction Applications
UNITED STATES DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT
WASHINGTON, D.C. 20240
http://www.blm.gov
September 26, 2014
In Reply Refer To:
3485 (320) P
EMS TRANSMISSION 12/19/2014
Instruction Memorandum No. 2014-156
Permanent
To: All Washington Office and Field Officials
From: Assistant Director, Energy, Minerals, and Realty Management
Subject: Supplemental Guidance on Processing Royalty Rate Reduction Applications
Program Area: Coal Management.
Purpose: This Instruction Memorandum (IM) provides State Directors (SD) notice that they must provide the Washington Office (WO) a royalty rate reduction (RRR) justification with a copy of their draft decision when requesting WO concurrence. A checklist is attached to ensure that all required RRR application elements are included. Further, this IM augments and reiterates the existing policy for processing RRR applications.
Policy/Action: RRR applications will continue to be processed using the established guidelines and procedures as follows:
- The manual Reports, Royalties, and Records, BLM MS-3485;
- The IM that amended the RRR guidelines for coal and non-coal solid minerals (WO-IM-90-380), and the clarification promulgated on May 2, 1990 (55 FR 18401); and
- The IMs that established the policies for leasing in the Fort Union coal region pursuant to Section 2505 of the Energy Policy Act of 1992, PL 102-486, (WO-IM-97-86 and WO-IM-2003-117).
The attached RRR checklist (attachment 1) provides a quick reference of items to be analyzed within an RRR decision before forwarding it to the WO for concurrence. The checklist also provides a ready reference for each of the five RRR categories as to what must be documented in the analysis to support an RRR decision. The WO will use the same checklist to review prospective RRR decisions to ensure that policies are being followed, before the WO concurs.
SDs will request the Office of Natural Resources Revenue (ONRR) to assist when RRR requests are based on financial hardship. The applicant’s lease account status must be in good standing for an RRR approval.
As part of the concurrence request, the SDs must provide the Assistant Director (AD), Energy, Minerals, and Realty Management, an RRR justification, the completed checklist, a copy of the complete application, and the draft SD decision. State offices will make every effort to process in a timely manner all RRR applications. State offices should also coordinate with the Solids Division personnel when compiling the RRR package for the Washington office review. These meetings will help facilitate a more timely and efficient review by the AD.
Timeframe: Effective immediately.
Budget Impact: Workloads associated with processing of royalty rate reduction applications will be funded through cost recovery fees paid by the applicant as provided in 43 CFR 3473.2(d). Additional justification and documentation required as a result of this policy could impact the number of reductions granted in the future.
Background: The Office of the Inspector General (OIG) completed an audit of the Federal Coal Management program entitled “Coal Management Program Evaluation, Report No. CR-EV-BLM-0001-2012.” This IM is in response to OIG recommendation 10, which states that the BLM should process RRR applications timely and request ONRR to assist when requests are based on financial hardship. This IM reemphasizes the existing policies and provides a checklist that will assist both the State Offices and the Washington Office in processing the applications in a timely fashion.
Manual/Handbook Sections Affected: The policies will be incorporated in the next revision of the Reports, Royalties, and Records, BLM MS-3485 manual.
Coordination: The WO Solid Minerals Division and state office coal specialists evaluated the OIG’s recommendation 10 and developed these steps to help ensure that existing RRR guidance is being followed and that applications are processed timely.
Contact: If you have any questions concerning the content of this IM, please contact me at 202-208-4201, or your staff may contact Mitchell Leverette, Division Chief Solid Minerals (WO-320) at 202-912-7113 or mleveret@blm.gov; or John A. Lewis, 202-912-7117, or j35lewis@blm.gov.
Signed by: Authenticated by:
Michael Nedd Ambyr Fowler
Assistant Director Division of IRM Governance (WO-860)
Energy, Minerals, and Realty Management
1 Attachment