Oil and Gas Leasing; Geothermal Resources Leasing; Coal Management; Management of Solid Minerals Other Than Coal; Mineral Materials Disposal; and Mining Claims Under the General Mining Laws, 41532-41554 [05-13613]

Agencies

• DEPARTMENT OF THE INTERIOR
• Bureau of Land Management
• Land Management Bureau

[Federal Register Volume 70, Number 137 (Tuesday, July 19, 2005)]
[Proposed Rules]
[Pages 41532-41554]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-13613]



[[Page 41531]]

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Part III





Department of the Interior





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Bureau of Land Management



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43 CFR Parts 3000, 3100, 3120, et al.



Oil and Gas Leasing: Geothermal Resources Leasing; Coal Management; 
Management of Solid Minerals Other Than Coal; Mineral Materials 
Disposal; and Mining Claims Under the General Mining Laws; Proposed 
Rule

Federal Register / Vol. 70, No. 137 / Tuesday, July 19, 2005 / 
Proposed Rules

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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Parts 3000, 3100, 3120, 3130, 3150, 3160, 3200, 3470, 3500, 
3600, 3800, 3830, 3833, 3835, 3836, 3860, and 3870

[WO-610-4111-02-24 1A]
RIN 1004-AC64


Oil and Gas Leasing; Geothermal Resources Leasing; Coal 
Management; Management of Solid Minerals Other Than Coal; Mineral 
Materials Disposal; and Mining Claims Under the General Mining Laws

AGENCY: Bureau of Land Management, Interior.

ACTION: Supplemental notice of proposed rule.

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SUMMARY: The Bureau of Land Management (BLM) is again proposing to 
amend its mineral resources regulations to increase many fees and to 
impose new fees to cover BLM's costs of processing certain documents 
relating to its minerals programs. This would include costs for actions 
such as environmental studies, monitoring activities, and other 
processing-related costs. The BLM would establish some fixed fees and 
some fees on a case-by-case basis. The proposed fee changes are based 
on statutory authorities, which authorize BLM to charge for its 
processing costs, and on policy guidance from the Office of Management 
and Budget (OMB) and the Department of the Interior (DOI) requiring BLM 
to charge these fees. The fee changes also respond to recommendations 
issued in audit reports by the DOI's Office of Inspector General (OIG).

DATES: You should submit your comments on or before August 18, 2005. 
The BLM may or may not consider comments postmarked or received by 
messenger or electronic mail after the above date in the decision-
making process on the final rule.

ADDRESSES: Mail Director (630), Bureau of Land Management, Eastern 
States Office, 7450 Boston Boulevard, Springfield, Virginia 22153. 
Personal or messenger delivery: 1620 L Street NW., Suite 401, 
Washington, DC 20036. Email: Comments_washington@blm.gov.

FOR FURTHER INFORMATION CONTACT: For issues related to BLM's Minerals 
Program contact Tim Spisak, Fluid Minerals Group Manager (202) 452-5061 
or Ted Murphy, Solid Minerals Division Manager (202) 452-0351. Contact 
Cynthia Ellis (202) 452-5012 for issues relating to BLM's regulatory 
matters. Individuals who use a telecommunications device for the deaf 
may contact these individuals through the Federal Information Relay 
Service at 1-800-877-8339, 24 hours a day, 7 days a week.

SUPPLEMENTARY INFORMATION:
I. Public Comment Procedures
II. Background
III. Discussion of the Proposed Rule
IV. Procedural Matters

I. Public Comment Procedures

A. How Do I File Comments?

    If you wish to comment, you may submit your comments by any one of 
several methods.
     Mail: Director (630), Bureau of Land Management, Eastern 
States Office, 7450 Boston Boulevard, Springfield, Virginia, 22153.
     Personal or messenger delivery: 1620 L Street NW., Suite 
401, Washington, DC 20036.
     Comments_washington@blm.gov.
    Please make your comments on the proposed rule as specific as 
possible, confine them to issues pertinent to the proposed rule, and 
explain the reason for any changes you recommend. Where possible, your 
comments should reference the specific section or paragraph of the 
proposal that you are addressing. Please include a reference to ``RIN 
1004-AC64'' in your comments.
    The DOI may or may not consider or include in the Administrative 
Record for the final rule comments that we receive after the close of 
the comment period (see DATES) or comments delivered to an address 
other than those listed above (see ADDRESSES). BLM has set the comment 
period for this proposed rule at 30 days. We believe this provides 
sufficient time for public comment because most of this rule was 
proposed in nearly identical form on December 15, 2000 (65 FR 78440-
78455). BLM extended the original comment period to over six months, 
until July 2, 2001 (66 FR 19413, April 16, 2001). We believe that 30 
days allows sufficient time to comment on the fees that are new in this 
proposed rule. Moreover, this rule is necessary to implement the cost 
recovery fee collection provisions included in the President's 2006 
Budget, as passed by Congress. Because the revenue is needed to cover 
BLM's operating expenses in FY 2006, it was determined that BLM could 
not provide a longer comment period without jeopardizing the 
government's ability to implement these fees in a timely manner.

B. May I Review Comments Others Submit?

    If you want your comments to remain confidential, do not send us 
your comments at the e-mail address. In addition, all comments, 
including names and street addresses of respondents, will be available 
for public review at the address listed under ADDRESSES: Personal or 
messenger delivery'' during regular business hours (7:45 a.m. to 4:15 
p.m.), Monday through Friday, except holidays.
    Individual respondents may request confidentiality, which we will 
honor to the extent allowable by law. If you wish to withhold your name 
or address, except for the city or town, you must state this 
prominently at the beginning of your comments. We will make all 
submissions from organizations or businesses, and from individuals 
identifying themselves as representatives or officials of organizations 
or businesses, available for public inspection in their entirety.
    If you provide comments on company or institutional letterhead, we 
will assume those comments were given with the approval of the 
organization and may identify them as such.
    BLM received 135 comments in response to the original proposed rule 
published on December 15, 2000, in the Federal Register (65 FR 78440-
78455). This reproposed rule has updated fees and clarifies several 
issues that were in the 2000 proposed rule. If you provided comments in 
response to the December 15, 2000, proposed rule you need not submit 
those comments again. We will address those comments in any final rule.

II. Background

    Federal agencies are authorized to charge processing costs by the 
Independent Offices Appropriation Act of 1952 (IOAA), 31 U.S.C. 9701. 
The BLM also has specific authority to charge fees for processing 
applications and other documents relating to public lands under section 
304 of the Federal Land Policy and Management Act of 1976 (FLPMA), 43 
U.S.C. 1734. Public lands in FLPMA means all lands or interests in land 
owned by the United States and administered by BLM, excluding outer 
continental shelf lands and Native American lands (43 U.S.C. 1702(e)). 
This applies to Federal mineral lands with private or state surface as 
well as to lands where the United States owns both the surface and 
mineral rights. The BLM interprets this definition to mean that a 
mineral lease or mineral materials disposal administered by BLM, or a 
mining claim

[[Page 41533]]

(for which BLM determines validity), even in land where another agency 
administers the surface, is an ``interest in land'' for the purposes of 
FLPMA. BLM is not proposing in this rule to recover costs for work we 
perform in administering Indian leases.
    Before BLM disposes of mineral materials or issues a mineral lease 
on these lands, if the surface managing agency also exercises any 
responsibility relating to disposal of the minerals, the mineral estate 
may not be sufficiently under the administrative control of BLM to 
qualify as public lands for purposes such as exchanges. However, once 
BLM issues a mineral lease or proceeds with a mineral materials 
disposal, we are administering an interest in the lands, and that 
interest now falls under the FLPMA definition of public lands. Because 
the Secretary of the Interior has primary jurisdiction over determining 
the validity of mining claims, and BLM administers the mineral estate 
covered by those claims, mining claims also qualify as public lands 
under FLPMA. Of course, BLM also has authority under the IOAA to 
collect fees for processing documents related to its administration of 
the mineral estate in these instances.
    The IOAA and section 304 of FLPMA authorize BLM to charge 
applicants for the cost of processing documents through the rulemaking 
process, which BLM is proposing to do through this rule. The IOAA also 
states that these charges should pay for the agency services, as much 
as possible.
    Cost recovery policies are explained in OMB Circular No. A-25 
(Revised) entitled ``User Charges.'' Part 346 of the Departmental 
Manual (DM) also provides guidance. The general Federal policy is that 
a charge will be assessed against each identifiable recipient for 
special benefits derived from Federal activities beyond those received 
by the public. (OMB Circular A-25.) The Circular establishes Federal 
policy regarding fees assessed for government services and for sales or 
use of government goods or resources. It provides information on the 
scope and types of activities subject to user charges and the basis 
upon which agencies set user charges. Finally, the Circular provides 
guidance for agency implementation of charges and the disposition of 
collections.
    The DOI Manual provides guidance and reflects the OMB cost recovery 
policy at 346 DM 1.2 A. Under that section, unless prohibited or 
limited by statute or other authority, BLM must impose a charge that:
    1. Recovers the bureau or office costs; and
    2. Recovers costs for all categories of service that provide 
special benefits to an identifiable recipient beyond those which accrue 
to the public at large.
    Certain activities may be exempted from these fees under conditions 
set out at 346 DM 1.2 C.
    In 1996, the Solicitor issued an M Opinion, entitled ``BLM's 
Authority to Recover Costs of Minerals Document Processing'' (M-36987, 
December 5, 1996), which analyzed the law related to BLM's cost 
recovery authority. In considering how BLM could structure its cost 
recovery, the Opinion noted, ``BLM could decide in certain instances to 
structure a rule so that a new fee is phased in over a period of 
time.'' M-36987 at page 36. This is based on the provision in Section 
304(b) of FLPMA (43 U.S.C. 1734 (b)) that the Secretary may consider 
other factors relevant to determining reasonable costs. (See ``What are 
the FLPMA Factors BLM Must Consider?'' below.) In this proposed rule, 
BLM is proposing to phase in certain fees to give companies adequate 
time to include all costs in their planning processes.
    On December 15, 2000, BLM proposed a rule to amend our mineral 
resource regulations to increase many fees and to impose new fees to 
cover our costs of processing certain documents relating to our mineral 
programs (65 FR 78440). The December 2000 proposed fee changes were 
BLM's response to recommendations made in a 1988 OIG report (No. 89-
25). This report was part of a 1980s presidential initiative that 
called for all Federal agencies to charge appropriate user fees, 
consistent with the law, for agency services. The OIG recommended that 
BLM collect fees for processing mineral-related documents whenever 
possible.
    In this proposed rule, we are reproposing the 2000 fees, and adding 
the following fees that were not included in the 2000 proposed rule:
    1. A processing fee for oil and gas applications for permit to 
drill (APDs),
    2. A processing fee for geothermal permits to drill (GPDs),
    3. A processing fee for geothermal exploration permits, and
    4. A processing fee for renewal of mineral materials competitive 
contracts.
    We are also proposing to charge a fixed fee for the processing of 
oil and gas geophysical exploration applications, instead of the case-
by-case fee that we proposed in 2000.
    For both the 2000 proposed rule and this proposed rule, we updated 
existing fees. This proposed rule covers only some of the documents for 
which BLM has the authority to recover processing costs. The BLM 
intends to continue to work on establishing and collecting fees for 
other documents including those addressed in the Solicitor's December 
5, 1996, M Opinion on this subject (M-36987). In the future, we expect 
to identify and propose fees for additional processing activities.

III. Discussion of the Proposed Rule

What Does ``Cost Recovery'' Mean in This Rulemaking?

    ``Cost Recovery'' means reimbursing BLM for the costs of processing 
applications and other documents relating to the public lands by 
charging a fee to the applicant or beneficiary.

What Is the Office of Inspector General (OIG)?

    This office, within the DOI, studies Departmental economy and 
efficiency and makes recommendations for improvement.

What OIG Reports Affected This Rulemaking?

    The OIG reports No. 89-25 (1988), No. 92-I-828 (1992), 95-I-379 
(1995) and No. 97-I-1300 (1997).

What Did the 1988 OIG Report (No. 89-25) Recommend?

    The report recommended that BLM:
    1. List all the mineral-related document types for which it had 
authority to charge BLM processing costs to the applicant;
    2. Determine the BLM processing costs for each type of document and 
count how many were processed;
    3. Establish exemption standards and apply them to each type of 
document on the list;
    4. Prepare and maintain exemption documentation for exempted 
document types; and
    5. Establish and collect processing cost fees for all non-exempt 
types of documents.

How Did BLM Gather Data for Cost Recovery in Response to the 1988 OIG 
Report?

    The BLM first conducted an inventory of about 130 types of 
documents in all onshore energy and mineral program areas: fluid 
minerals (including geothermal resources) leasing and operations; solid 
leasable minerals (coal and non-energy minerals) leasing and 
operations; mining law administration (locatable minerals); and mineral 
materials (saleable minerals such as sand and gravel). The BLM used 
this inventory to determine the types of documents for which it 
appeared we had authority to collect processing costs.

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How Did BLM Analyze Its Costs for Types of Documents That Appeared To 
Be Eligible for Processing Fees?

    We started with a pilot analysis in the BLM Montana State Office 
and then surveyed all BLM State Offices in 1990. To ensure that the 
State Offices used the same data-gathering approach, the BLM Washington 
Office gave all State Offices a copy of Part 346 of the DM, three types 
of standard forms to record the data, and detailed instructions 
previously tested for clarity in the Montana Pilot Analysis.

Were There Differences in the Processing Costs and Number of Document 
Filings Processed for Each State Office?

    Yes. The BLM's preliminary review of the data showed large cost 
differences among offices for processing certain types of documents, as 
well as big differences in the numbers of documents filed and 
processed. For example, office processing costs for a mineral materials 
noncompetitive sale application ranged from $234 to $4,773. As 
discussed below, BLM reconsidered the State Offices' estimated costs 
for noncompetitive sales applications and determined that the 
differences in estimates were attributable to unique site- or sale-
specific factors.
    Similarly, the number of mining law affidavits of assessment filed 
in State Offices for Fiscal Years (FY) 1988-1990 varied from about 
2,761 to 251,564. For certain mineral-related document types, some 
offices had no activity during the three years sampled.

What Did BLM Do To Reconcile the Differences in the Data?

    The BLM decided to use a weighted average rather than a simple 
average to determine a BLM-wide processing cost for each type of 
document. This method gave greater weight to the processing cost data 
from State Offices having a heavy workload, and thus more expertise, in 
processing a particular type of document.
    Between 1995 and 1999, we re-analyzed much of the data, conducted 
spot checks to verify its continued validity, and adjusted it to 
current prices. In 2003, we reviewed the processing details for the 
different types of documents dating from 1995 and determined that the 
information was current.

What Did the OIG's Follow-Up Report Find?

    The report (No. 95-I-379, January 1995) found that, of the five 
recommendations in the 1988 OIG report, BLM had:
     Implemented the first, third, and fourth recommendations,
     Partially implemented the second recommendation to 
determine the cost and number of each document filing processed, and
     Not yet implemented the fifth recommendation to establish 
and collect BLM processing cost fees for non-exempt types of documents.
    The OIG sent BLM a draft of this report to which we responded in 
August 1994. We met with the OIG and discussed issues raised by the 
report, including the issue of guidance and standards in data 
gathering. We also provided supplemental information to the OIG in 
December 1994 to resolve the issue.

What Observations and Recommendations Did the 1995 OIG Report Make?

    The OIG noted the wide variations in estimates of the time and cost 
needed to process types of documents among various BLM State Offices, 
and made two recommendations to BLM from the draft report. First, BLM 
should develop document processing standards, request cost information 
from State Offices based on these standards and analyze and resolve 
significant differences in the collected data, particularly for types 
of documents which have major impacts on the total amount of money that 
BLM can recover. Next, BLM should expedite the establishment and 
collection of fees for processing types of documents which have major 
impacts on the total amount of money that BLM can recover, and continue 
efforts to establish and collect fees for other types of documents.
    The report noted that in the supplemental information provided in 
December 1994, BLM told the OIG that it had developed guidance/
standards that were used by all State Offices to achieve uniformity in 
data gathering and reporting. It pointed out that BLM said we would 
establish a multi-program team to continue examining fees to establish 
a consistent cost recovery program. Based on our responses to the draft 
report, the final 1995 OIG report concluded that both recommendations 
were resolved but not implemented.

How Did BLM Respond to the 1995 Report?

    After the OIG issued the 1995 report BLM created a multi-program 
team to update its processing cost data, with priority given to 
establishing and collecting fees for types of documents with a 
significant impact on the total amount of money that we can recover. To 
update the existing data and verify its accuracy, the team gathered new 
estimates of the number of annual filings, updated processing cost 
estimates, and assigned BLM mineral experts to review the data in their 
specialties.

How Did BLM Analyze the 1990 Cost Data for Oil, Gas, and Geothermal in 
Response to the 1995 OIG Report?

    BLM's fluid minerals program re-analyzed this data, comparing the 
data and identifying the appropriate job position, salary level, and 
time needed for each step indicated in BLM oil, gas, and geothermal 
Handbooks to process each type of document. The 1990 data was also 
based on the steps in the Handbooks. Based on this analysis, we 
calculated a direct cost (see discussion of direct/indirect costs 
below) for each step of the process, which was then adjusted to 1995 
salary rates without a locality factor. BLM later added indirect costs. 
We used these cost figures in this proposed rule as the actual cost 
estimates for oil and gas and geothermal document types, from which the 
fees were determined. The BLM relied on this method for oil and gas and 
geothermal because the assigned program expert believed it would yield 
accurate cost estimates.

How Did BLM Update the 1990 Cost Data for Mineral Materials, Coal, 
Nonenergy Leasable Minerals, and Mining Law in Response to the 1995 OIG 
Report?

    We spot-checked the data by resubmitting it to selected BLM State 
Offices that often process these particular categories of documents. We 
also sent each of these offices a summary of the cost data that the 
office had previously submitted for these types of documents, along 
with the BLM-wide weighted average cost for each of them. We requested 
that the State Offices review the cost data and report whether that 
data, adjusted to current prices, remained reasonable. We requested 
that the State Office re-estimate costs for that state if it found the 
re-examined adjusted cost data to be unreasonable for that point in 
time. Our re-examination verified that BLM's data continued to be valid 
and ensured that figures, which varied significantly among offices, had 
not been submitted in error. We used this method for these programs 
because our program experts believed it would yield accurate data and 
be cost-effective. In addition, for mineral materials, the team 
reconsidered the State Offices' estimated costs for noncompetitive sale 
applications that the 1995 report had

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highlighted. The team determined that the differences among State 
Offices were largely caused by unique site- or sale-specific factors. 
BLM considered the amount and nature of surface disturbance, for 
example, whether the sales are from existing or new pits, and how much 
material is to be removed; the impact on other surface resources (which 
may vary even within the same area); and National Environmental Policy 
Act (NEPA) analysis.
    To bring the figures in line with 1999 prices, in preparation for 
the 2000 proposed rulemaking, BLM adjusted them to the Implicit Price 
Deflator for Gross Domestic Product (IPD-GDP) for 1998 (the most recent 
year then available) published by the U.S. Department of Commerce, 
which economists generally consider to be the most reliable general 
price index.

How Has BLM Implemented the 1995 OIG Recommendations?

    As explained above, BLM resolved the first part of the OIG's first 
recommendation about what standards we used by sending the OIG 
information in response to the draft report about our use of concrete 
standards in data collection. The BLM updated the proposed fees and 
updated, analyzed, and verified the data, which responded to the second 
part of the OIG's first recommendation. This rule proposes to implement 
the first part of the second 1995 OIG recommendation: BLM would collect 
fees for types of documents that have a significant impact on the 
amount of money BLM can recover. This proposed rule covers only some of 
the documents for which BLM has the authority to recover costs. BLM 
intends to continue our work to establish and collect fees for other 
documents as well, including those addressed in the Solicitor's 
December 5, 1996 M Opinion on this subject (M-36987). This satisfies 
the second part of the OIG's second recommendation.

The 2000 Proposal and This Proposed Rule

    The BLM decided to propose the entire rulemaking again because we 
are proposing a different type of processing fee for oil and gas 
geophysical exploration applications, and new processing fees for APDs, 
GPDs, geothermal exploration permits, and mineral materials competitive 
contract renewals.
    BLM has also determined it is appropriate to include an initial fee 
schedule in the regulations. Fee revisions adjusted for inflation will 
take place by way of publication in the Federal Register, with 
subsequent posting on our Web site. For an explanation of how BLM 
proposes to adjust fees in the future, see ``How Did BLM Address 
Increased Costs Due to Inflation?'' below.

What Is the Proposed Processing Fee for Oil and Gas Geophysical 
Exploration Applications?

    In the 2000 proposed rule, we included a case-by-case processing 
fee for geophysical exploration applications. Since that time, we have 
implemented an activity-based coding system that allows us to better 
track such costs. In reviewing the 2000 proposed fees in preparation 
for this proposed rulemaking, we determined that the costs of 
processing oil and gas geophysical exploration applications are quite 
high, averaging approximately $8,000 to $10,000.
    The BLM determined these amounts by analyzing data we collected for 
two years (2002 and 2003) through the Management Information System 
(MIS), BLM's activity-based coding system. One program element in MIS 
(added in 2001) is dedicated to oil and gas geophysical exploration 
applications. To determine our costs for oil and gas geophysical 
exploration applications, we first considered the total cost to a Field 
Office for processing these applications and divided that number by the 
total number of geophysical exploration applications processed by that 
Field Office. We repeated the procedure for each Field Office. However, 
because we did not receive a significant number of geophysical 
exploration applications in the two-year period analyzed, we have not 
determined a final estimated average cost. We will continue to collect 
and analyze cost data for geophysical exploration applications. At this 
time we have decided to set a target fee of $2,500, which we are 
confident is well below what the final estimated average cost will be, 
based on the time it takes to complete an environmental assessment and 
the fieldwork required. Because we propose to phase in this initial fee 
over several years, as discussed below, we expect to be able to propose 
a fee based on our final estimated average cost in a new rulemaking by 
the end of the phase-in period. We considered the other FLPMA factors 
and determined that the factors would not cause a reasonable fee to be 
reduced below actual costs except as noted below. (See ``How Did BLM 
Consider the ``FLPMA Factors?'' and the discussion following it 
regarding each factor, below.)
    As explained earlier, based on the ``other relevant factors'' 
criterion, in order to allow companies to plan for these potentially 
significant new costs, we propose to phase in this fee, beginning with 
a fixed fee of $500. The geophysical exploration application fee will 
be raised $500 each year until it reaches $2,500 (as adjusted by the 
IPD-GDP). The base fee will be adjusted for inflation every year by 
applying the IPD-GDP. The new fee will apply to all applications filed 
on or after October 1 each year. Further cost analysis will determine 
the final estimated average cost that will be set through future 
rulemaking. We invite comment on this proposed rule regarding whether 
these initial fees are appropriate, or whether they should be higher or 
lower.

What Is the Proposed Processing Fee for Applications for Geothermal 
Exploration (e.g., Temperature Gradient Wells)?

    The BLM determined the cost of processing geothermal exploration 
applications by analyzing data we collected for two years (2002 and 
2003) through the MIS. One project code (added in 2001) used in 
conjunction with the program element in MIS (added in 2001) is 
dedicated to geothermal exploration applications. To determine our 
costs, we first considered the total cost to a Field Office for 
processing geothermal exploration applications and divided that number 
by the total number of geothermal exploration applications processed by 
that Field Office. We repeated the process for each Field Office. Over 
those two years, the average cost of processing a geothermal 
exploration permit application was $3,200. However, we received only 
three applications during the two-year period analyzed. Because we 
believe additional data is required to come up with an accurate cost, 
we have not determined a final estimated average cost. We will continue 
to collect and analyze cost data for geothermal exploration 
applications. At this time we have decided to set a target fee of 
$2500, which we are confident is below what the final estimated average 
cost will be based on the time required to complete an environmental 
assessment. Because we propose to phase in this initial fee over 
several years, as discussed below, we expect to be able to propose a 
fee based on our final estimated average cost in a new rulemaking by 
the end of the phase-in period. We considered the other FLPMA factors 
and determined that the factors would not cause a reasonable fee to be 
reduced below actual costs except as noted below. (See ``How Did BLM 
Consider the ``FLPMA Factors?'' and the

[[Page 41536]]

discussion following it regarding each factor, below.)
    As explained earlier, based on the ``other relevant factors'' 
criterion, in order to allow companies to plan for these potentially 
significant new costs, we propose to phase in these fees, beginning 
with a fixed fee of $500. The geothermal exploration application fee 
will be raised $500 each year until it reaches $2,500 (as adjusted by 
the IPD-GDP). The base fee will be adjusted for inflation every year by 
applying the IPD-GDP. The new fee will apply to all applications filed 
on or after October 1 each year. Further cost analysis will determine 
the final estimated average cost that will be set through future 
rulemaking. We invite comment on this proposed rule regarding whether 
these initial fees are appropriate, or whether they should be higher or 
lower.

What Is the Proposed Processing Fee for Oil and Gas Applications for 
Permit To Drill (APDs)?

    To determine BLM's costs to process APDs, we analyzed the data we 
collected for that activity for four years (2001 through 2004) through 
the MIS. One program element in MIS (added in 2000) is dedicated to 
processing APDs.
    To determine our costs for APDs, we first considered the total cost 
to a Field Office of processing APDs and divided that number by the 
total number of APDs processed by that Field Office. We repeated this 
procedure for each Field Office. We determined that the average cost 
for Field Offices that process more APDs did not vary significantly 
from costs for other Field Offices. Therefore, we decided to use the 
average cost from all field offices as our actual cost figure. Over the 
four year-year period analyzed, we found that the average cost of 
processing an APD was about $4,000.
    We considered the other FLPMA factors, and determined that the 
factors would not cause a reasonable fee for APDs to be reduced below 
actual costs, except as noted below. (See ``How Did BLM Consider the 
FLPMA Factors?'' based on the ``other relevant factors'' criterion 
explained earlier, and the discussion following each factor, below.) As 
with oil and gas geophysical exploration, and geothermal exploration, 
we propose to phase in these fees, beginning with a fixed fee of $1600, 
to give companies adequate time to include these potentially 
significant new costs in their planning processes. The APD fee will be 
raised $500 each year until it reaches $4,000 (as adjusted by the IPD-
GDP). The base fee will be adjusted for inflation every year by 
applying the IPD-GDP. The new fee will apply to all applications filed 
on or after October 1 each year. We invite comment on this proposed 
rule regarding whether these initial fees are appropriate, or whether 
they should be higher or lower. We also invite comment on what impacts, 
if any the proposed APD fee could have on the level of a company's 
operations on Federal lands. In particular, we are interested in how 
the proposed fee might affect the competitiveness of Federal oil and 
gas leases as compared to non-Federal leases.

What Is the Proposed Processing Fee for Geothermal Permits To Drill 
(GPDs)?

    We used the same process to determine BLM's costs to process GPDs. 
We analyzed the data we collected for this activity for three years 
(2001 through 2003) through the MIS. A project code in MIS (added in 
2000) is also dedicated to processing GPDs. We followed the same 
procedure that we did for APDs and determined that the average cost to 
process a GPD over the past three years was $3,500. We considered the 
other FLPMA factors, and determined that the factors would not cause a 
reasonable fee for GPDs to be reduced below actual costs, except as 
noted below. (See ``How Did BLM Consider the FLPMA Factors?'' based on 
the ``other relevant factors'' criterion explained earlier and the 
discussion following each factor, below.) As with oil and gas 
geophysical exploration and geothermal exploration, we propose to phase 
in these fees, beginning with a fixed fee of $1600, to give companies 
adequate time to include these potentially significant new costs in 
their planning processes. The GPD fee will be raised $500 each year 
until it reaches $3,500 (as adjusted by the IPD-GDP). The base fee will 
be adjusted for inflation every year by applying the IPD-GDP. The new 
fee will apply to all applications filed on or after October 1 each 
year. We invite comment on this proposed rule regarding whether these 
initial fees are appropriate, or whether they should be higher or 
lower.

What Is the Proposed Processing Fee for Mineral Materials Competitive 
Contracts?

    We are proposing to charge a case-by-case fee for applications to 
renew mineral materials competitive contracts, consistent with the 
proposed case-by-case fees for mineral materials competitive and 
noncompetitive sales applications. The option to renew a mineral 
materials competitive contract was added to the regulations in the 
final rule that became effective on December 24, 2001 (66 FR 58892).

What Kinds of Fees Would This Rule Create?

    This rule would establish fixed fees and fees based on BLM's case-
by-case processing costs. A fixed fee remains the same for each 
document of a particular type. How BLM set these fixed fees is 
explained below. A fee based on BLM's case-by-case processing costs 
would be calculated by tracking the ongoing costs of processing an 
individual document.
    As this proposed rule was being prepared for publication, BLM 
became aware that the case-by-case procedures outlined in proposed 
section 3000.11 are not appropriate for fees charged to the successful 
bidder in a lease sale or mineral materials sale context, because in 
those situations BLM has already performed the work and has tracked its 
costs for that work. We therefore intend to include in the final rule a 
different set of procedures for charging a case-by-case fee to the 
successful bidder in a lease sale or mineral materials sale, which will 
include a provision allowing the successful bidder to comment on the 
proposed fee before the fee is made final. These different procedures 
would apply to the successful applicant for a competitive coal lease 
(see proposed Sec.  3473.2(f)), a competitive solid minerals lease (see 
proposed Sec.  33508.21(c)), and a competitive mineral materials sale 
(see proposed Sec.  3602.44(f)). BLM solicits comments on how it should 
draft the procedures for charging case-by-case fees to successful 
bidders.

Are Fixed Fees Appealable?

    No. The amount of a fixed fee is not appealable to the Interior 
Board of Land Appeals because it is set by regulation. There is no 
discretion to change it.

Does this Proposed Rule Contain Waivers or Reduction of Fixed Fees?

    No. We have not included provisions in this proposed rule for 
waiver or reduction of fixed fees because we believe that such 
provisions are neither appropriate nor necessary for a rule that would 
impose fees only on for-profit commercial enterprises. While payment of 
the proposed fee could reduce an entity's profit level, waiving or 
reducing the fee for that entity would simply mean that United States 
taxpayers would bear the costs that the for-profit entity was not 
bearing. However, we welcome comments on this issue and we will 
consider further whether to include provisions for waiver or reduction 
of fixed fees in the final rule.

Are Case-by-Case Fees Appealable?

    Yes. Applicants may appeal case-by-case fees to the Interior Board 
of Land

[[Page 41537]]

Appeals in accordance with the Department's appeals rules at 43 CFR 
part 4, subpart E.

What Are the FLPMA Factors BLM Must Consider?

    Section 304(b) of FLPMA lists six factors (known as the FLPMA 
reasonableness factors) that BLM must consider in deciding what is a 
reasonable processing fee. They are:
    (1) BLM's actual costs to process a document. This does not include 
management overhead, which means costs of BLM State Directors and 
Washington Office staff, except when a member of this group works on a 
specific authorization such as a lease. Actual costs include (but are 
not limited to) funds spent on special studies, environmental impact 
statements and other analyses, and monitoring of exploration activities 
and development, and of construction, operation, maintenance, or 
termination of an authorized facility.
    (2) The monetary value, or objective worth, of the right or 
privilege that the applicant seeks.
    (3) The efficiency with which BLM processes a document, meaning 
with a minimum of waste by carefully managing agency expenses and time.
    (4) Whether any of BLM's processing costs, for actions such as 
studies or data collection, benefit the general public or the Federal 
Government, rather than just the applicant. This is referred to in the 
statute as ``benefit of the general public interest.''
    (5) Whether the project provides any significantly tangible 
improvement, such as a road, or other direct service to the public. 
Occasionally, a negative factor, such as an adverse impact on wildlife 
or surface drainage, may prevent an improvement from being regarded as 
a public service. Data collection that we need you to perform so we can 
monitor an activity is not a public service.
    (6) Other relevant factors.

How Did BLM Consider the FLPMA Factors for Fees?

    We considered each of the FLPMA factors for each type of document 
for which we are proposing a fixed fee in this rule. The BLM first 
estimated the actual cost to process a type of document and then 
considered each of the other FLPMA factors to see if any of them might 
cause a fee to be set at less than actual cost. If so, we then 
considered whether any of the remaining factors acted as an enhancing 
factor that would mitigate against setting the fee at less than actual 
cost. We then decided the amount of the fee, which cannot be more than 
our processing cost. For most minerals actions in this proposal, this 
method resulted in fees set at our actual processing cost.
    BLM would also weigh the FLPMA factors to determine case-by-case 
fees. For those fees, BLM would give the applicant an estimate of the 
proposed fee after estimating the actual cost of processing the 
individual document and considering the other FLPMA factors. The 
applicant could then comment on the proposed fee. We would consider the 
applicant's comments and any work to be performed by the applicant, and 
give the applicant a final fee estimate. We could re-estimate 
reasonable costs whenever necessary. If the established fee you would 
pay is less than our actual costs because of one of the FLPMA factors, 
and we are not able to process the document promptly because of the 
unavailability of funding or other resources, you would have the option 
to pay BLM's actual costs to process your document.
    In cases (including many environmental impact statements) where BLM 
might hire a third-party contractor to perform part of the processing, 
your payment of actual costs would allow BLM to hire the contractor 
without waiting for the availability of funding. If all processing of 
your document were to be done by BLM personnel, your place in the queue 
of documents would not be affected by whether you paid actual (as 
opposed to reasonable) costs.
    In considering the FLPMA factors, we found several trends. First, 
the monetary value of the right or privilege was much greater than the 
processing cost. Next, our document processing procedures, which are 
based on standard steps in internal BLM handbooks, are reasonably 
efficient.
    We also found that none of the studies or data collection performed 
as part of BLM's document processing significantly benefits the public. 
The courts have held that processing which an agency is required to 
perform in connection with a specific request (for example, before 
approving a permit) provides a special benefit to an applicant, even if 
it also provides some benefit to the public. See, e.g., Mississippi 
Power & Light Co. v. United States Nuclear Regulatory Commission, 601 
F.2d 223 (5th Cir. 1979), cert. denied 444 U.S. 1102 (1980). BLM found 
that any small benefit to the public provided by the processing of 
fixed-fee documents in this rulemaking is speculative and outweighed by 
the monetary value to the applicant of the right or privilege.
    In addition, the applicant's project usually provides little or no 
service to the public. Even if a project provides a small public 
service, it usually is outweighed by the monetary value to the 
applicant of the right or privilege. Finally, there rarely are other 
relevant factors present. Our consideration of the FLPMA factors is 
explained below:

Actual Costs

Did BLM Consider Figuring and Charging Processing Costs on a Case-by-
Case Basis for Every Type of Document?

    Yes. We decided not to charge processing costs on a case-by-case 
basis for every type of document because it would require enormous 
effort and expense. In addition, when we can reliably estimate costs 
for routine services, we believe applicants benefit from knowing fees 
in advance. We would determine costs on a case-by-case basis only for 
types of documents where the average processing cost may not be a 
reasonably accurate estimate because costs may differ significantly in 
each case.

How Does BLM Figure Its Costs To Process a Document?

    Actual costs are the sum of both direct and indirect costs. Direct 
costs include such things as labor, material, and equipment; BLM's 
measurement of direct costs is explained below. Indirect costs include 
items such as rent and overhead, excluding State Director and 
Washington Office management overhead.
    For an example of how BLM would determine the sum of direct and 
indirect costs, assume the measured direct cost of processing a 
document is $200. To estimate the indirect cost for processing that 
document, the BLM office would use a ratio already determined in its 
accounting system--perhaps, ten to one, meaning for every $10 of direct 
costs there would be $1 of indirect costs. BLM would then estimate the 
indirect cost using the ratio and direct cost figures. In this example, 
since the direct cost was $200 and the ratio is ten to one, the 
indirect cost is $20. BLM then would add the direct and indirect cost 
figures to arrive at the actual cost figure of $220 to process the 
document. This method is generally accepted in the private and public 
sectors.

For What Types of Documents Would BLM Measure Actual Costs on a Case-
by-Case Basis?

     Competitive lease applications for coal;
     Royalty rate reduction applications for coal;

[[Page 41538]]

     Logical mining unit (LMU) applications and applications 
for LMU modifications for coal;
     Applications for lease modifications for coal;
     Prospecting permit applications for non-energy leasable 
minerals;
     Preference right lease applications for non-energy 
leasable minerals;
     Competitive lease applications for non-energy leasable 
minerals;
     Royalty rate reduction applications for non-energy 
leasable minerals;
     Noncompetitive sale applications for mineral materials;
     Competitive sale applications for mineral materials;
     Competitive contract renewal applications for mineral 
materials;
     Lease or sales applications when an Environmental Impact 
Statement (EIS) is required;
     Mining plans of operations when an EIS is required; and
     Mineral validity examinations/reports (includes field 
mapping, field sampling, assays, determination of reserves and 
marketability, etc.).

What Would Case-by-Case Fee Calculations Include?

    They would include all costs we incur while processing your 
document, such as the costs of studies BLM conducts to comply with 
legal requirements like environmental laws, the mineral leasing laws, 
or the Mining Law of 1872. When we conduct a mineral validity 
examination/report as a result of your application for a plan of 
operations or mineral patent, or your notice under 43 CFR 3809.301, the 
mineral examiner would consider the cost to you for the examination and 
report along with other costs of doing business in evaluating whether 
you have made a valuable discovery of minerals on the claim. This is 
because the cost of a mineral exam/report is a business cost similar to 
the cost of complying with environmental requirements, which may be 
significant in deciding whether there has been a discovery. See United 
States v. Pittsburgh Pacific Co., 30 IBLA 388, 84 I.D. 282, 290 (1977); 
United States v. Kosanke Sand Corp., 12 IBLA 282, 298-99, 80 I.D. 538, 
546-47 (1973) (on reconsideration).
    Also, although current proposed section 3800.5 refers to applicants 
for a plan of operations or a mineral patent ``under this part,'' i.e., 
43 CFR part 3800, BLM may provide in the final rule that BLM will also 
recover costs of validity examinations and reports performed in 
connection with plan of operation applications that are submitted under 
other parts of the CFR as well, such as 36 CFR part 9 (which implements 
the Mining in the Parks Act).

How Would BLM Apply the Proposed Fees to Documents That BLM Is Already 
Processing?

    The BLM would not charge a fixed fee under this rule for processing 
a document BLM accepted before the effective date of a final rule with 
the appropriate fees under then-existing rules. Also, if we began 
processing a document before the effective date of this rule that would 
be subject to a case-by-case fee, we would charge fees under this rule 
only for costs incurred after the rule's effective date.

How Did BLM Measure Its Direct Actual Costs for Types of Documents It 
Proposes Not To Measure on a Case-by-Case Basis?

    We used an agency-wide average cost figure for each type of 
document. This is a reasonable approximation of our actual processing 
cost for that document type, as well as an efficient method of 
measuring the cost.

What Data Did BLM Use to Calculate the Average Cost?

    Except for new fees, we used the data collected from State Offices 
in 1990, as analyzed and updated in 1995-1996 and in 1999. In the areas 
of oil and gas and geothermal, with the exception of oil and gas 
geophysical exploration, geothermal exploration, APDs, and GPDs, 
explained above, we used our re-analyzed direct cost estimate, to which 
indirect costs were added, as the average cost figure. In other areas, 
we used the weighted average cost, which included indirect costs, as 
the average cost figure. As explained above, we adjusted the average 
cost figures to account for inflation before proposing the rule in 
2000. In this proposed rule, we again adjusted the fees to account for 
inflation, using the IPD-GDP. (See ``How Did BLM Address Increased 
Costs Due to Inflation?'' below.)

What Processing Steps Are Included in the Fixed Fees?

Oil and Gas
    For applications for permit to drill (APDs), fixed fees would 
include, but not be limited to, costs for receiving, validating, and 
entering data; assigning case numbers; ascertaining land status; 
identifying any special land status such as a Wilderness Study Area 
(WSA) or an Area of Critical Environmental Concern (ACEC); ascertaining 
the nature and extent of proposed activity, and verifying that the 
project is technically feasible; surveying impacts on other resources, 
including environmental review and field work; and accommodating other 
land uses, as BLM deems necessary.
    For applications for oil and gas geophysical exploration permits, 
fixed fees would include, but not be limited to, costs for receiving, 
validating, and entering data; assigning case numbers; ascertaining 
land status; identifying any special land status such as a WSA or an 
ACEC; ascertaining the nature and extent of proposed activity, and 
verifying that the project is technically feasible; surveying impacts 
on other resources, including environmental review and field work; and 
accommodating other land uses, as BLM deems necessary.
    For noncompetitive lease applications, fixed fees would include, 
but not be limited to, costs for receiving, validating, and entering 
data; examining land availability; sorting parcels (i.e., developing 
parcel configuration/acreage); preparing stipulations; preparing sale 
notices; noting title records; preparing and conducting sale auctions; 
preparing lease decisions; and entering and transmitting data updates.
    For competitive lease applications, fixed fees would include, but 
not be limited to, costs for preparing sale notices; noting title 
records; preparing and conducting sale auctions; preparing lease 
decisions; and entering and transmitting data updates. At this point, 
this fee does not include steps leading to sorting parcels, i.e., 
developing parcel configuration/acreage, and preparing stipulations.
    For assignments and transfers, fixed fees would include, but not be 
limited to, costs for receiving, validating, and entering data; 
examining assignment and transfer forms; reviewing leases and bonds; 
and approving, entering, and transmitting updates.
    For assignments and transfers due to name changes, corporate 
mergers, or transfer to an heir or devisee, fixed fees would include, 
but not be limited to, costs for receiving, validating, and entering 
data; examining requests; determining successors-in-interest or other 
special requirements; reviewing leases and bonds; preparing decisions; 
and entering and transmitting updates.
    For transfers of overriding royalties or payments out of 
production, fixed fees would include, but not be limited to, costs for 
receiving, validating, and entering data.
    For lease consolidations, fixed fees would include, but not be 
limited to, costs for receiving, validating, and entering data; 
examining requests, lease term conditions and production; preparing new 
leases and decisions; and entering and transmitting updates.

[[Page 41539]]

    For lease renewals, fixed fees would include, but not be limited 
to, costs for receiving, validating, and entering data; examining 
requests and lease forms for compliance; preparing decisions; and 
entering and transmitting updates.
    For Class 1 lease reinstatements, fixed fees would include, but not 
be limited to, costs for receiving, validating, and entering data; 
examining eligibility; preparing decisions; and entering and 
transmitting updates.
Geothermal
    For applications for GPDs, fixed fees would include, but not be 
limited to, costs for receiving, validating, and entering data; 
assigning case numbers; ascertaining land status; identifying any 
special land status such as a WSA or an ACEC; ascertaining the nature 
and extent of proposed activity and verifying that the project is 
technically feasible; surveying impacts on other resources, including 
environmental review and field work; and accommodating other land uses, 
as BLM deems necessary.
    For applications for geothermal exploration permits, fixed fees 
would include, but not be limited to, costs for receiving, validating, 
and entering data; assigning case numbers; ascertaining land status; 
identifying any special land status such as a WSA or an ACEC; 
ascertaining the nature and extent of proposed activity and verifying 
that the project is technically feasible; surveying impacts on other 
resources, including environmental review and field work; and 
accommodating other land uses, as BLM deems necessary.
    For noncompetitive lease applications, fixed fees would include, 
but not be limited to, costs for receiving, validating, and entering 
data; examining land availability; sorting parcels (i.e., developing 
parcel configuration/acreage); preparing stipulations; preparing sale 
notices; noting title records; preparing and conducting sale auctions; 
preparing lease decisions; and entering and transmitting data updates.
    For competitive lease applications, fixed fees would include, but 
not be limited to, costs for preparing sale notices; noting title 
records; preparing and conducting sale auctions; preparing lease 
decisions; and entering and transmitting data updates. At this point, 
this fee does not include steps leading to sorting parcels, i.e., 
developing parcel configuration/acreage, and preparing stipulations.
    For assignments and transfers, fixed fees would include, but not be 
limited to, costs for receiving, validating, and entering data; 
examining assignment and transfer forms; reviewing leases and bonds; 
and approving, entering, and transmitting updates. For assignments and 
transfers due to name changes, corporate mergers, or transfer to an 
heir or devisee, fixed fees would include receiving, validating, and 
entering data; examining requests; determining successors-in-interest 
or other special requirements; reviewing leases and bonds; preparing 
decisions; and entering and transmitting updates.
    For lease reinstatements, fixed fees would include, but not be 
limited to, costs for receiving, validating, and entering data; 
examining eligibility; preparing decisions; and entering and 
transmitting updates.
Non-Energy Leasable Minerals
    For prospecting permit application amendments, fixed fees would 
include, but not be limited to, costs for receiving, validating, and 
entering data; examining requests and rental payments; and entering and 
transmitting updates.
    For prospecting permit extensions, fixed fees would include, but 
not be limited to, costs for receiving, validating, and entering data; 
examining requests and diligence; and approving, entering, and 
transmitting updates.
    For lease renewals, fixed fees would include, but not be limited 
to, costs for receiving, validating, and entering data; examining 
requests; determining changes in bonds and stipulations; preparing 
decisions; and entering and transmitting updates.
Mining Law Administration
    For notices of location, fixed fees would include, but not be 
limited to, costs for receiving data and validating land status; 
collecting statutory fees; and entering data. For amendments to a 
location, fixed fees would include costs for receiving, validating, and 
entering data.
    For a mineral patent adjudication, fixed fees would include, but 
not be limited to, costs for receiving and entering data; examining 
mineral surveys, statements required by statute, initial descriptions 
of geology and mineral evidence, and status of adverse claims; ensuring 
sufficiency of title evidence (title opinion or abstract with certified 
copies of location certificates and all amendments); publishing legal 
notices; receiving and examining final proofs and statements for 
sufficiency; accepting purchase monies; forwarding the application to 
the Secretary for review; and issuing decisions. Fixed fees would not 
include the cost of a mineral examination and report, which would be 
covered by a case-by-case fee.
    For transfers, fixed fees would include, but not be limited to, 
costs for receiving, validating, and entering data. BLM's costs are 
calculated for each transferee if a mining claim or site is transferred 
to more than one person. It has been BLM's policy to charge this fee 
for each transferee. We propose to clarify this in Sec.  3833.32(c) by 
changing the wording from ``You as transferee'' to ``Each transferee.''
    For affidavits of assessment work, fixed fees would include, but 
not be limited to, costs for receiving, validating, and entering data.
    For notices of intent to hold, fixed fees would include, but not be 
limited to, costs for receiving, validating, and entering data.
    For deferments of assessment work, fixed fees would include, but 
not be limited to, costs for receiving and entering data; examining 
requests; determining eligibility; approving or rejecting requests; 
entering and transmitting updates; and issuing decisions.
    For adverse claims, fixed fees would include, but not be limited 
to, costs for receiving and entering data; examining evidence; 
accepting or denying claims; and issuing decisions.
    For protests, fixed fees would include, but not be limited to, 
costs for receiving and entering data; examining evidence; and issuing 
decisions to either dismiss or accept a protest. Fixed fees would not 
include costs associated with adjudications to correct errors or 
omissions uncovered by a protest.

How Did BLM Address Increased Costs Due to Inflation?

    For this proposed rule we applied the IPD-GDP, discussed above, for 
the fourth quarter of 2003 to the fees in the 2000 proposed rule to 
account for inflation. At the time, we began preparing this proposed 
rule, that information was the most recent data available. Because we 
did not know when the proposed rule would be published, we did not 
update the fees again before publication. We will again adjust the fees 
in this proposed rule by using the IDP-GDP for the fourth quarter of 
the most recent year available before issuing the final rule.
    The BLM proposes to adjust the fees annually to the IPD-GDP, to 
bring them in line with current costs. We chose this method because the 
alternative is to collect data periodically to adjust fees to 
inflation, which is inefficient, costly, and impractical. BLM proposes 
that it amend the fees by publication in the Federal Register and post 
the adjusted fees on its Web site prior to October 1 each year, and 
that the posted fees would become effective each year on October 1. BLM 
selected October 1 as the appropriate date to increase fees and

[[Page 41540]]

service charges in the fee schedule because it is the beginning of the 
fiscal year for government agencies and is the common implementation 
date for various fees. Because we are proposing to establish the 
process for changing fees in this rule, and the application of that 
process is simply a mathematical calculation, a new rulemaking will not 
be necessary. If we decide to amend fees based on something other than 
the IPD-GDP, we would do so through proposed notice and comment 
rulemaking.
    We note that some fees for documents in the 2000 proposed rule were 
not processing fees, but were already-existing filing fees that we did 
not propose to change. They were included in that proposed rule, and we 
are proposing to retain them in this proposed rule, because they are 
part of the section under revision that addresses fees. We also are 
proposing to adjust the existing filing fees at this time. The 
Solicitor's Opinion on cost recovery explains, ``[n]ominal `filing' 
fees * * * serve to limit filings to serious applicants [and] are not 
intended to reimburse the United States for its processing costs.'' (M-
36987 at p.4) It makes sense to adjust these filing fees periodically 
to account for inflation as well, so we have applied the IPD-GDP to the 
filing fees that were included in the 2000 proposed rule. These filing 
fees will also be adjusted annually using the IPD-GDP, as explained 
above.

How Did BLM Round Fees?

    Although in this proposed rule, we have rounded estimated costs to 
the nearest dollar, in the final rule we propose to round fees down or 
up to the nearest $5, for ease of payment and administration. This is 
consistent with general business practices.

Might BLM Adjust Its Average Cost Figures and Revise Fees in the Future 
for Reasons Other Than Inflation?

    Yes. The fees in this rule do not include certain internal steps 
for which we believed costs could not be recovered when we initially 
collected data. For example, the costs for processing an oil and gas or 
geothermal competitive lease sale parcel do not include the steps 
required to prepare an individual sale parcel prior to preparing the 
sale notice, because we assumed those costs were not recoverable. 
However, the Solicitor's December 5, 1996 Opinion on cost recovery 
concluded that we can recover costs for those steps, so in future rules 
we will propose fees that attempt to capture these costs and other 
costs not captured here so that fees will accurately reflect our 
reasonable costs. We may also amend fees in future rulemakings when we 
receive new data or have another reason to believe that fees do not 
accurately reflect reasonable costs. As opposed to simple adjustments 
for inflation based on the IPD-GDP, any such changes to the fees would 
be through a notice and comment rulemaking process.

Monetary Value of the Right or Privilege

Did BLM Calculate Exact Figures for the Monetary Value to the Applicant 
in Setting the Proposed Fixed Fees?

    No. We decided not to try to calculate precise dollar values to the 
applicant of receiving the benefit applied for, either by document type 
or on a case-by-case basis, because that would involve extensive time 
and resources. Instead, we made an effort to judge the magnitude of 
these values. We have used this approach before. For example, in the 
preamble to the 1986 rights-of-way regulations (51 FR 26836), we 
considered monetary value in a general sense rather than precise 
figures.

How Did BLM Consider the Monetary Value of the Right or Privilege 
Granted by a Fixed Fee Document?

    To gauge the monetary value, BLM considered the monetary value of 
similar rights or privileges, granted to applicants historically. We 
reviewed each type of document and compared the proposed processing fee 
for a given type of document with our sense of the historical values of 
rights or privileges we have granted that are similar to those sought 
by the applicant. In each case, we believe the value of the right or 
privilege is clearly so much greater than the processing cost that a 
fee set at the average actual cost would not significantly affect the 
proposed action. This is not surprising considering that the costs 
pertain to documents related to the development of commercial minerals. 
We did not reduce any fees because of this factor. We would consider 
the monetary value of the benefit to the applicant for case-by-case 
fees in a similar manner.

Do Fees Change if Leases Are Found After Exploration To Have Less Value 
Than Previously Thought?

    No. BLM bases its decision about the monetary value of the benefit 
to the applicant on the value at the time the applicant submits its 
lease application. All leases have relatively large monetary value 
before exploration compared to the proposed fees. The basic value of 
the opportunity provided by a lease to explore for minerals is shown by 
the willingness of applicants to pay large sums before exploration for 
bonus bids, for lease transfers, and for exploration activities such as 
drilling. We therefore decided that it is reasonable to charge a fee 
equal to our processing costs for all lease applications.

How Did BLM Consider the Value of Requests for Lease Sales, Requests 
for Sales, or Expressions of Interest?

    In accordance with the Solicitor's December 5, 1996, Opinion on 
cost recovery, BLM considers that its processing costs to prepare 
parcels for sale or lease sale benefit three classes of beneficiaries: 
the party who requests that the parcel be included in the sale or lease 
sale; all parties who bid on the parcel; and the successful bidder.
    While the party who requests that a parcel be included in a sale or 
lease sale benefits by influencing the selection of parcels offered, 
BLM believes this benefit is greatly outweighed by the benefit to the 
bidder who ultimately obtains the lease or sales contract and can 
develop the minerals on the parcel. Similarly, while all bidders 
receive the benefit of being considered for a lease or sales contract, 
BLM