§ 1735. — Delegation of royalty collections and related activities.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 30USC1735]
TITLE 30--MINERAL LANDS AND MINING
CHAPTER 29--OIL AND GAS ROYALTY MANAGEMENT
SUBCHAPTER II--STATES AND INDIAN TRIBES
Sec. 1735. Delegation of royalty collections and related
activities
(a) Authorization of Secretary
Upon written request of any State, the Secretary is authorized to
delegate, in accordance with the provisions of this section, all or part
of the authorities and responsibilities of the Secretary under this
chapter to:
(1) conduct inspections, audits, and investigations;
(2) receive and process production and financial reports;
(3) correct erroneous report data;
(4) perform automated verification; and
(5) issue demands, subpoenas, and orders to perform restructured
accounting, for royalty management enforcement purposes,
to any State with respect to all Federal land within the State.
(b) Prerequisites
After notice and opportunity for a hearing, the Secretary is
authorized to delegate such authorities and responsibilities granted
under this section as the State has requested, if the Secretary finds
that--
(1) it is likely that the State will provide adequate resources
to achieve the purposes of this chapter;
(2) the State has demonstrated that it will effectively and
faithfully administer the rules and regulations of the Secretary
under this chapter in accordance with the requirements of
subsections (c) and (d) of this section;
(3) such delegation will not create an unreasonable burden on
any lessee;
(4) the State agrees to adopt standardized reporting procedures
prescribed by the Secretary for royalty and production accounting
purposes, unless the State and all affected parties (including the
Secretary) otherwise agree;
(5) the State agrees to follow and adhere to regulations and
guidelines issued by the Secretary pursuant to the mineral leasing
laws regarding valuation of production; and
(6) where necessary for a State to have authority to carry out
and enforce a delegated activity, the State agrees to enact such
laws and promulgate such regulations as are consistent with relevant
Federal laws and regulations
with respect to the Federal lands within the State.
(c) Ruling as to consistency of State's proposal
After notice and opportunity for hearing, the Secretary shall issue
a ruling as to the consistency of a State's proposal with the provisions
of this section and regulations under subsection (d) of this section
within 90 days after submission of such proposal. In any unfavorable
ruling, the Secretary shall set forth the reasons therefor and state
whether the Secretary will agree to delegate to the State if the State
meets the conditions set forth in such ruling.
(d) Promulgation of standards and regulations with respect to delegation
After consultation with State authorities, the Secretary shall by
rule promulgate, within 12 months after August 13, 1996, standards and
regulations pertaining to the authorities and responsibilities to be
delegated under subsection (a) of this section, including standards and
regulations pertaining to--
(1) audits to be performed;
(2) records and accounts to be maintained;
(3) reporting procedures to be required by States under this
section;
(4) receipt and processing of production and financial reports;
(5) correction of erroneous report data;
(6) performance of automated verification;
(7) issuance of standards and guidelines in order to avoid
duplication of effort;
(8) transmission of report data to the Secretary; and
(9) issuance of demands, subpoenas, and orders to perform
restructured accounting, for royalty management enforcement
purposes.
Such standards and regulations shall be designed to provide reasonable
assurance that a uniform and effective royalty management system will
prevail among the States. The records and accounts under paragraph (2)
shall be sufficient to allow the Secretary to monitor the performance of
any State under this section.
(e) Revocation; issuance of demand or order by Secretary
If, after notice and opportunity for a hearing, the Secretary finds
that any State to which any authority or responsibility of the Secretary
has been delegated under this section is in violation of any requirement
of this section or any rule thereunder, or that an affirmative finding
by the Secretary under subsection (b) of this section can no longer be
made, the Secretary may revoke such delegation. If, after providing
written notice to a delegated State and a reasonable opportunity to take
corrective action requested by the Secretary, the Secretary determines
that the State has failed to issue a demand or order to a Federal lessee
within the State, that such failure may result in an underpayment of an
obligation due the United States by such lessee, and that such
underpayment may be uncollected without Secretarial intervention, the
Secretary may issue such demand or order in accordance with the
provisions of this chapter prior to or absent the withdrawal of
delegated authority.
(f) Compensation to State for costs of delegation; allocation of costs
Subject to appropriations, the Secretary shall compensate any State
for those costs which may be necessary to carry out the delegated
activities under this Section.\1\ Payment shall be made no less than
every quarter during the fiscal year. Compensation to a State may not
exceed the Secretary's reasonably anticipated expenditure for
performance of such delegated activities by the Secretary. Such costs
shall be allocable for the purposes of section 191(b) of this title to
the administration and enforcement of laws providing for the leasing of
any onshore lands or interests in land owned by the United States. Any
further allocation of costs under section 191(b) of this title made by
the Secretary for oil and gas activities, other than those costs to
compensate States for delegated activities under this chapter, shall be
only those costs associated with onshore oil and gas activities and may
not include any duplication of costs allocated pursuant to the previous
sentence. Nothing in this section affects the Secretary's authority to
make allocations under section 191(b) of this title for non-oil and gas
mineral activities. All moneys received from sales, bonuses, rentals,
royalties, assessments and interest, including money claimed to be due
and owing pursuant to a delegation under this section, shall be payable
and paid to the Treasury of the United States.
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\1\ So in original. Probably should not be capitalized.
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(g) Judicial review
Any action of the Secretary to approve or disapprove a proposal
submitted by a State under this section shall be subject to judicial
review in the United States district court which includes the capital of
the State submitting the proposal.
(h) Existing delegation
Any State operating pursuant to a delegation existing on August 13,
1996, may continue to operate under the terms and conditions of the
delegation, except to the extent that a revision of the existing
agreement is adopted pursuant to this section.
(Pub. L. 97-451, title II, Sec. 205, Jan. 12, 1983, 96 Stat. 2459; Pub.
L. 104-185, Sec. 3(a), Aug. 13, 1996, 110 Stat. 1702.)
Codification
August 13, 1996, referred to in subsec. (d), was in the original
``the date of enactment of this section'', which was translated as
meaning the date of enactment of Pub. L. 104-185, which amended this
section generally, to reflect the probable intent of Congress.
August 13, 1996, referred to in subsec. (h), was in the original
``the date of enactment of this Act'', which was translated as meaning
the date of enactment of Pub. L. 104-185, which amended this section
generally, to reflect the probable intent of Congress.
Amendments
1996--Pub. L. 104-185 amended section generally, substituting
present provisions for provisions which stated in subsec. (a),
authorization of Secretary to delegate to States except permission of
Indian tribe required with respect to Indian lands; subsec. (b),
prerequisites; subsec. (c), promulgation of regulations defining joint
functions; subsec. (d), promulgation of standards and regulations with
respect to delegation; subsec. (e), revocation; and subsec. (f),
compensation to State for costs of delegation.
Effective Date of 1996 Amendment
Amendment by Pub. L. 104-185 applicable with respect to production
of oil and gas after the first day of the month following Aug. 13, 1996,
see section 11 of Pub. L. 104-185, set out as a note under section 1701
of this title.
Applicability of 1996 Amendment
Amendment by Pub. L. 104-185 not applicable to any privately owned
minerals or with respect to Indian lands, see sections 9 and 10 of Pub.
L. 104-185, set out as a note under section 1701 of this title.
Section Referred to in Other Sections
This section is referred to in sections 196, 1702, 1724, 1731a,
1733, 1736 of this title.
