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, 58854-58880 [05-19851]

Agencies

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

[Federal Register Volume 70, Number 194 (Friday, October 7, 2005)]
[Rules and Regulations]
[Pages 58854-58880]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-19851]



[[Page 58853]]

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Part IV





Department of the Interior





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Bureau of the Interior



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43 CFR Parts 3000, 3100 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; Final Rule

Federal Register / Vol. 70, No. 194 / Friday, October 7, 2005 / Rules 
and Regulations

[[Page 58854]]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Parts 3000, 3100, 3110, 3120, 3130, 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: Final rule.

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SUMMARY: The Bureau of Land Management (BLM) is issuing this final rule 
to amend its mineral resources regulations to increase certain fees and 
to impose new fees to cover BLM's costs of processing documents 
relating to its minerals programs. The new fees include costs of 
actions such as environmental studies performed by BLM, lease 
applications, name changes, corporate mergers, lease consolidations and 
reinstatements, and other processing-related costs. BLM established 
some fixed fees and some fees on a case-by-case basis. BLM based these 
fee changes on statutory authorities, which authorize us to charge for 
our 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. This rule also responds to 
recommendations issued in audit reports by the DOI's Office of 
Inspector General (OIG). The final rule also reflects changes to the 
proposed rule required by the Energy Policy Act of 2005.

DATES: This rule is effective November 7, 2005.

ADDRESSES: You may mail suggestions or inquiries to Bureau of Land 
Management, Minerals Group, Room 501 LS 1849 C Street, NW., Washington, 
DC 20240-0001.

FOR FURTHER INFORMATION CONTACT: Tim Spisak, Fluid Minerals Group 
Manager (202) 452-5061 or Ted Murphy, Solid Minerals Group Manager 
(202) 452-0351, for issues related to BLM's minerals programs, or 
Cynthia Ellis, Regulatory Affairs Group (202) 452-5012, for regulatory 
process issues. Persons 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. Background
    A. Procedural Background
    B. Authority for This Rule
    C. Continuation of Rulemaking
II. How Does the Final Rule Differ From the Proposed Rule?
III. Responses to Comments on the December 2000 and July 2005 
Proposed Rules
    A. General Comments
    B. Comments on Oil and Gas Leasing Cost Recovery
    C. Comments on Geothermal Leasing Cost Recovery
    D. Comments on Coal Leasing Cost Recovery
    E. Comments on Cost Recovery for Leasing of Solid Minerals Other 
Than Coal
    F. Comments on Cost Recovery for Mineral Materials Sales
    G. Comments on Cost Recovery for Mining Law Administration
IV. Procedural Matters

I. Background

A. Procedural Background

    On December 15, 2000, BLM published a proposed 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 fee changes were BLM's response to 
recommendations made in a 1988 OIG report (No. 89-25). That 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.
    On July 19, 2005, BLM reissued the proposed rule (70 FR 41532), and 
added 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 renewing mineral materials competitive 
contracts.
    The 2005 proposed rule also included a fixed fee for the processing 
of oil and gas geophysical exploration permits, instead of the case-by-
case fee that we proposed in 2000.
    This final rule adopts many provisions of the July 19, 2005 
proposal. We discuss below changes we have made from that proposal. The 
rationale for most of this final rule was set forth in the July 2005 
preamble and BLM continues to rely on the discussions contained 
therein.

B. Authority for This Rule

    Federal agencies are authorized to charge processing costs by the 
Independent Offices Appropriation Act of 1952 (IOAA), 31 U.S.C. 9701. 
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. This section was discussed in greater detail in the July 
2005 preamble. In FLPMA, public land 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 includes Federal mineral lands with private or state 
surface as well as lands where the United States owns both the surface 
and mineral rights. A mineral lease or mineral materials disposal 
administered by BLM, and a mining claim (for which BLM determines 
validity), even in land where another agency administers the surface, 
are ``interests in land'' for the purposes of FLPMA.
    The IOAA and Section 304 of FLPMA authorize BLM to charge 
applicants for the cost of processing documents by issuing regulations, 
which BLM is doing in 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) (Circular A-25), entitled ``User Charges.'' Part 346 of the 
Departmental Manual (DM) also provides guidance. The general Federal 
policy as stated in Circular A-25 is that a charge will be assessed 
against each identifiable recipient for special benefits derived from 
Federal activities beyond those received by the public. 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, Circular A-25 guides agency implementation of charges and the 
disposition of collections.
    Section 365 of the Energy Policy Act of 2005 (Pub. L. 109-58) 
authorized a pilot project to improve Federal permit coordination, and 
directed in subsection (i) that ``the Secretary shall not implement a 
rulemaking that would enable an increase in fees to recover additional 
costs related to processing drilling-related permit applications and 
use authorizations.'' The provisions of the proposed rule related to 
drilling-

[[Page 58855]]

related permit applications and use authorizations are those that would 
have required cost recovery for oil and gas and geothermal permits to 
drill (APDs and GPDs), and geophysical and geothermal exploration 
permits. Therefore, we have removed all provisions regarding APDs, 
GPDs, and geophysical and geothermal exploration permits that appeared 
in the proposed rule from this final rule. The remainder of the 2005 
proposed rule was not affected by the Energy Policy Act and may be 
finalized.

C. Continuation of Rulemaking

    In the preamble to the July 19, 2005, proposed rule, we explained 
that in the final rule we might provide that BLM would recover costs of 
validity examinations and reports performed in connection with plan of 
operations (PoO) applications submitted under parts of the Code of 
Federal Regulations other than 43 CFR part 3800, such as those 
submitted under 36 CFR part 9, which implements the Mining in the Parks 
Act. (See 70 FR 41538.) The National Park Service (NPS) submitted a 
comment urging BLM to include in the final rule recovery of such costs 
for applications submitted pursuant to NPS regulations. At this time, 
BLM has not made a final decision whether to extend the rule to cover 
such other costs. Thus, BLM is including in this final rule the 
provision as proposed, but is continuing the rulemaking on the issue of 
whether it will revise the provision to include recovery of costs of 
validity examinations and reports associated with PoOs submitted under 
other parts of the CFR. BLM may issue a further final rule to address 
this issue. If BLM decides to promulgate a final rule that would 
recover such costs, the next final rule would likely contain conforming 
amendments to such other parts to notify affected applicants of the 
applicability of the cost recovery provisions of this rule.

II. How Does the Final Rule Differ From the Proposed Rule?

    As stated earlier, in response to Congress's direction in the 
Energy Policy Act, BLM is not implementing cost recovery fees for APDs, 
GPDs, and geophysical and geothermal exploration permits.
    Other changes we made are:
    1. We adjusted the fees proposed in 2000 by using the Implicit 
Price Deflator for 4th Quarter 2004 (110.077) (IPD), rounded to the 
nearest $5.00. For example, for an oil and gas lease reinstatement, the 
cost recovery fee proposed in 2000 was $60. Applying the IPD, the 
equivalent cost recovery fee for the 4th Quarter 2004 would be $66.05. 
For this final rule, we rounded this figure to $65.
    2. We amended the coal lease by application regulations. The 
proposed rule did not adequately account for case-by-case fee 
situations where the successful bidder is an entity other than the 
original applicant. The final coal leasing regulations at 43 CFR 3473.2 
provide that the applicant who nominates a tract will pay BLM the 
processing costs that we incur up to the publication of the competitive 
lease sale notice. That fee amount will be included in the notice 
itself, and the successful bidder, if someone other than the original 
applicant, will be responsible for paying that amount to BLM. In such 
circumstances, BLM will refund the fees the original applicant paid to 
BLM. If there is no successful bidder, the applicant will remain 
responsible for processing fees and there will be no refund. It should 
be noted that an applicant will not be reimbursed for moneys the 
applicant (and not BLM) may pay directly to third persons to perform 
studies, because it is not clear that FLPMA Section 304 applies in that 
situation.
    Because persons other than the applicant could also be a successful 
bidder under BLM's other programs, we have made similar changes to the 
regulations at 43 CFR part 3500 applicable to the leasing of solid 
minerals other than coal, and to the mineral materials sales 
regulations at 43 CFR part 3600.
    3. We amended the mining claim patent application adjudication fee 
so that patent applications covering 10 or fewer claims will be charged 
only half the cost recovery fee that applications with more than 10 
claims will be charged. This change was made in response to comments 
expressing concern that the proposed fee would be too burdensome on 
claimants who submit patent applications for only a few claims. We 
selected the 10-claim threshold because that is the number Congress 
chose to define the class of miners who may perform assessment work in 
lieu of paying the claim maintenance fee. The adjudication fee in the 
proposed rule was a fixed fee based on a weighted average of BLM's 
adjudication costs. We believe that the commenters may have a valid 
concern and that it may be more reasonable to base the adjudication 
fees on the per claim costs depending on how many claims are included 
in an application. BLM plans to reassess its costs of adjudication and 
may propose a revision to this fee in the future. In this final rule, 
we decided that it was reasonable to phase in the adjudication fee for 
patent applications that contain 10 or fewer claims. A discussion of 
phasing in fees is contained in the preamble to the proposed rule. 70 
FR 41533. This rule contains the first step of this phasing-in process.
    4. The final rule adds language at section 3000.11 to clarify that 
a decision of BLM to change a fixed fee to a case-by-case fee may be 
appealed to the Interior Board of Land Appeals.
    5. In response to comments objecting to the applicability of the 
fee provisions to applications pending when this rule is made final, we 
have revised the rule to make the fee provisions of the final rule 
applicable only to documents BLM receives after the effective date of 
this rule. Section 3000.10(d) has been restructured to clarify the 
timing of the applicability of both fixed and case-by-case fees 
established by this rule. Because both the new fixed and case-by-case 
fee provisions apply only to documents received after the effective 
date of this rule, proposed section 3000.11(c), which would have 
addressed how to treat costs of pending documents, is not necessary and 
has not been included in the final rule. Also, rather than include in 
section 3000.10(a) a statement that required fees must be included with 
documents that are filed, we moved the statement to section 3000.12(a) 
of this chapter to make it clear that such a requirement applies only 
to fixed fees. We have also amended paragraphs (d)(1) and (d)(2) of 
section 3000.10 to make it clear that the documents for which BLM will 
begin to charge the new fees are those that BLM receives on or after 
November 7, 2005. The proposed rule referred to documents that BLM 
``accepted.'' We have amended this language to avoid confusion. The 
date of receipt may be easily evidenced by a log-in date on the 
document or by a receipt given to an applicant by BLM.
    6. We amended the language of section 3000.11(b)(4)(i) to clarify 
that we will not stop ongoing processing if we re-estimate the costs 
associated with a case-by-case document. (This issue is further 
discussed in the preamble under III.A. General Comments.) We also moved 
the last sentence of section 3000.11(b)(4)(ii) regarding refunds into a 
new paragraph (b)(4)(iii) to make it clear that whenever money paid as 
a case-by-case fee was not spent on processing costs, BLM will refund 
that money once processing is complete.
    We wish to make one further clarification with regard to section 
3000.11, relating to the charging of processing fees on a case-by-case 
basis. Under paragraph (a), if at any time BLM

[[Page 58856]]

decides that a particular document designated for a fixed fee will have 
a unique processing cost, such as an Environmental Impact Statement, we 
may set the fee under the case-by-case procedures. BLM intends to 
recover on a case-by-case basis those costs that BLM incurs following 
the decision that the document processing will have a unique processing 
cost. BLM will not charge for costs that BLM incurred before that 
decision was made. The applicant will receive a credit for any fixed 
fee already paid against the case-by-case fees that are billed.
    7. We have clarified the final regulatory text for section 3800.5 
as it relates to the applicability of case-by-case cost processing for 
validity examinations and common variety determinations associated with 
mining notices, applications for PoOs, and applications for patents. We 
divided proposed paragraph (b) into final paragraphs (b) and (c). 
Revised paragraph (b) relates to mining notices and plans of operation 
and redesignated paragraph (c) applies to patent applications.
    Revised paragraph (b) makes it clear that a notice level operation 
or an applicant for a plan of operations for which a mineral 
examination, including a validity examination or a common variety 
determination, and associated reports, are performed and prepared under 
43 CFR 3809.100 or 3809.101, must pay a processing fee on a case-by-
case basis. It was not BLM's intent to include validity examinations 
BLM may perform on its own volition that are not performed under 
sections 3809.100 or 3809.101. This change is in response to comments 
that the regulatory text contained in the July 2005 proposed rule was 
confusing. It also should be noted that the cost recovery provisions 
are not intended to modify BLM policy as to when mineral examinations 
are performed.
    Final paragraph (c) provides that an applicant for a mineral patent 
under 43 CFR subpart 3860 must pay a processing fee on a case-by-case 
basis as described in section 3000.11 for any validity examination and 
report prepared in connection with the application. This includes any 
analyses performed in connection with the validity examination and 
report, such as common variety determinations. Although contained in a 
new paragraph, this is not a substantive change from the July 2005 
proposed rule. 43 CFR subpart 3860 applies to all mineral patent 
applications that BLM processes, regardless of the agency with surface 
management responsibility for the lands covered by the patent 
applications. Thus, case-by-case cost recovery will occur for validity 
examinations associated with BLM processing of mineral patent 
applications, whether the surface is administered by BLM, the U.S. 
Forest Service, NPS, or other agencies.
    BLM wishes to make one further clarification with regard to section 
3800.5(a), relating to the case-by-case cost recovery for the 
processing of PoOs requiring the preparation of an environmental impact 
statement. Under paragraph (a), an applicant for a PoO under 43 CFR 
part 3800 must pay a processing fee on a case-by-case basis as 
described in 43 CFR 3000.11 whenever BLM decides that consideration of 
the PoO requires the preparation of an Environmental Impact Statement 
(EIS). The costs that BLM intends to recover on a case-by-case basis 
under the final rule are those costs BLM incurs following the decision 
that an EIS is necessary, not costs that BLM may have incurred before 
that decision.
    8. As a conforming amendment, we added language revising section 
3835.32(c) so that it refers to a processing fee rather than a non-
refundable service charge. Paragraph (c) includes a cross-reference to 
the table in section 3830.21 on service charges and fees, which BLM 
considered for amendment in the proposed rule. This conforming 
amendment to section 3835.32 was inadvertently omitted in the proposed 
rule.
    The rule also contains other technical conforming and editorial 
changes.
    Today's rule adopts both fixed fees and case-by-case fees. The 
table below sets forth the final fees that are imposed by this rule, 
compared to the fees as proposed in 2000 and 2005.

                                           Table 1.--Fees for FY 2006
  [Note that fees will be adjusted annually for changes in the IPD-GDP, published in the Federal Register, and
                      posted on BLM's website. Revised fees are effective each October 1.]
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                                                        Proposed fee in     Proposed fee in
         Document/action             Existing fee          2000 rule         2005 rule \1\       Final fee \2\
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Oil and Gas (Part 3100, 3110,
 3120, 3130):
    Noncompetitive lease          $75...............  $305..............  $324..............  $335
     application.
    Competitive lease             $75...............  $120..............  $127..............  $130
     application.
    Assignment and transfer.....  $25...............  $70...............  $74...............  $75
    Overriding royalty transfer,  $25...............  $9................  $10...............  $10
     payment out of production.
    Name change, corporate        $0................  $160..............  $170..............  $175
     merger or transfer to heir/
     devisee.
    Leases consolidation........  $0................  $335..............  $356..............  $370
    Lease renewal or exchange...  $75...............  $305..............  $324..............  $335
    Lease reinstatement, Class I  $25...............  $60...............  $64...............  $65
    Leasing under right-of-way..  $75...............  $305..............  $324..............  $335
    Geophysical exploration       $0................  Case-by-case......  $500..............  $0
     notice of intent--outside
     Alaska.
    Geophysical exploration       $25...............  Case-by-case......  $500..............  $25
     permit application--Alaska.
    Application for Permit to     $0................  Not included......  $1600.............  $0
     Drill (AP).
Geothermal (Group 3200):
    Noncompetitive lease          $75...............  $305..............  $324..............  $335
     application.
    Competitive lease             $0................  $120..............  $127..............  $130
     application.
    Assignment and transfer of    $50...............  $70...............  $74...............  $75
     record title or operating
     right.
    Name change, corporate        $0................  $160..............  $170..............  $175
     merger or transfer to heir/
     devisee.
    Lease consolidation.........  $0................  $335..............  $356..............  $370

[[Page 58857]]

 
    Lease reinstatement.........  $0................  $60...............  $64...............  $65
    Exploration operations        $0................  Not included......  $500..............  $0
     permit application.
    Geothermal Permit to Drill    $0................  Not included......  $1600.............  $0
     (GPD).
Coal (Group 3400):
    License to mine application.  $10...............  $10...............  $11...............  $10
    Exploration license           $250..............  $250..............  $266..............  $275
     application.
    Lease or lease interest       $50...............  $50...............  $53...............  $55
     transfer.
    Competitive coal lease......  $250..............  Case-by-case......  Case-by-case......  Case-by-case
    Coal lease modification.....  $250..............  Case-by-case......  Case-by-case......  Case-by-case
    Logical mining unit           $0................  Case-by-case......  Case-by-case......  Case-by-case
     formation or modification.
    Royalty reduction             $0................  Case-by-case......  Case-by-case......  Case-by-case
     application.
Nonenergy Leasable (Group 3500):
    Applications other than       $25...............  $25...............  $27...............  $30
     those listed below.
    Prospecting permit            $0................  $50...............  $53...............  $55
     application amendment.
    Extension of prospecting      $25...............  $80...............  $85...............  $90
     permit.
    Lease renewal...............  $25...............  $390..............  $414..............  $430
    Prospecting permit            $25...............  Case-by-case......  Case-by-case......  Case-by-case
     application.
    Preference right lease        $0................  Case-by-case......  Case-by-case......  Case-by-case
     application.
    Successful competitive lease  $0................  Case-by-case......  Case-by-case......  Case-by-case
    Application to suspend,       $0................  Case-by-case......  Case-by-case......  Case-by-case
     waive or reduce your
     rental, minimum royalty,
     production royalty or
     royalty rate.
    Future or fractional          $25...............  Case-by-case......  Case-by-case......  Case-by-case
     interest lease application.
Mineral Materials Disposal
 (Group 3600):
    Noncompetitive sale           $0................  Case-by-case......  Case-by-case......  Case-by-case
     (excluding sales from
     community pits or common
     use areas).
    Competitive sale............  $0................  Case-by-case......  Case-by-case......  Case-by-case
    Competitive contract renewal  $0................  N/A...............  Case-by-case......  Case-by-case
Mining Law Administration (Group
 3800):
    Notice of Location \3\......  $10...............  $15...............  $16...............  $15
    Amendment of location.......  $5................  $10...............  $11...............  $10
    Transfer of mining claim/     $5................  $10...............  $11...............  $10
     site.
    Recording an annual FLPMA     $5................  $10...............  $11...............  $10
     filing Sec.   3835.30).
    Deferment of Assessment.....  $25...............  $80...............  $85...............  $90
    Mineral Patent Adjudication.  1st claim--$250     $2,290............  $2,433............  $2,520 (>10
                                   Each additional                                             claims)
                                   claim $50.                                                 $1,260 \4\ (10 or
                                                                                               fewer claims)
    Adverse claim...............  $10...............  $80...............  $85...............  $90
    Protest.....................  $10...............  $50...............  $53...............  $55
    Plan of Operations with EIS.  $0................  Case-by-case......  Case-by-case......  Case-by-case
    Validity and Mineral          $0................  Case-by-case......  Case-by-case......  Case-by-case
     Examinations and Reports
     performed in connection
     with a Patent Application,
     43 CFR 3809.100 or 43 CFR
     3809.101.
----------------------------------------------------------------------------------------------------------------
\1\ The fees proposed in July 2005 adjusted the fees proposed in 2000 by using the Implicit Price Deflator 4th
  Quarter 2003 (106.244) and rounding to the nearest dollar.
\2\ The fees in this final rule adjusted the fees proposed in 2000 by using the Implicit Price Deflator for 4th
  Quarter 2004 (110.077), then rounding to the nearest $5.00.
\3\ The existing fee for recording a mining claim or site location (43 CFR 3833) is a total of $165. This
  includes the initial maintenance fee of $125 and one time $30 location fee required by statute and the $10
  service charge shown in the table. The service charge becomes a $15 processing fee in this final rule, making
  the total fee $170.
\4\ In this final rule, the fixed fee for adjudication of mineral patents has been modified in response to
  comments received. Applications with 10 or fewer claims will be charged a fixed fee of $1,260. Where the
  mineral patent application includes more than 10 claims, the fee will be $2,520.

III. Responses to Comments on the December 2000 and July 2005 Proposed 
Rules

    In this section of the preamble, we respond to the substantive 
comments that we received on the December 15, 2000, proposed rule (65 
FR 78440) and on the proposed rule published in the Federal Register on 
July 19, 2005 (70 FR 41532). In response to the December 15, 2000, 
proposed rule (65 FR 78440), BLM received approximately 136 comments. 
In response to the 2005 re-proposed rule (70 FR 41532), BLM received 
approximately 43 comments.

A. General Comments

    Although BLM received some comments in support of the rule, the 
majority of comments generally opposed

[[Page 58858]]

any fee increases in BLM Mineral Programs. The commenters expressed 
many reasons for opposing the rule. Some commenters said that BLM 
appeared to have based the fee changes on out-of-date data from fiscal 
years 1988 to 1990. Similarly, a commenter said that BLM used cost 
recovery data from a period of low activity, resulting in an inaccurate 
fee structure.
    The commenters are incorrect in asserting that BLM based the fees 
solely on data from fiscal years 1988 to 1990. In the mid-1990s, BLM 
reanalyzed the data and conducted spot checks to verify their continued 
validity as explained in more detail in the preamble to the proposed 
rule (70 FR 41534). BLM's processes covered by this rule have not 
changed significantly since that time. Moreover, we have adjusted the 
fees using the Implicit Price Deflator for 4th Quarter 2004 to reflect 
current costs. Accordingly, we believe that the fees in this final rule 
are not out of date. Moreover, the period for which BLM collected data 
was not a period of particularly low activity.
    Some commenters asserted that the cost recovery fees are equivalent 
to a tax on producers. The commenters also objected to the proposed 
rule because operators already pay for the services provided by BLM 
through taxes. They recommended that operators be given a tax incentive 
or tax credit to offset the cost of these higher fees.
    We disagree. The fees in this rule are not a tax. The fees are 
charged for special benefits received by identifiable beneficiaries and 
are intended to reimburse the agency for the costs of processing the 
various energy and minerals related filings. Creating tax incentives 
and tax credits to offset the cost to the operator of these fees is not 
part of this rule, and it is outside BLM's or DOI's jurisdiction or 
authority to initiate such a rule.
    Some commenters asserted that the fees in this rule are unjustified 
in light of the fact that the government receives other revenues such 
as royalties, bonus bids, and rentals for the mineral activities 
covered by these fees, which in their view should cover processing 
costs. A commenter recommended that BLM deduct the costs of processing 
minerals and energy documents from the royalties that BLM is already 
paid. As an example, a commenter stated that the public receives ``the 
vast portion of the revenues from the proceeds from the federal coal 
lease'' but has no overhead costs or investment risks.
    We disagree. Royalties, rents, and bonus bids reflect the value of 
the resource to the lessor. Congress authorized BLM to recover 
processing costs, and did so fully aware that BLM was already 
collecting bonuses, rents, and royalties, so there cannot have been any 
legislative intent that one fee should offset another.
    BLM charges processing fees pursuant to its authorities under the 
Independent Offices Appropriation Act, as amended, 31 U.S.C. 9701 
(IOAA); Section 304(a) of FLPMA; Circular A-25; DOI Manual 346 DM 1.2 
A; and case law (also see the preamble to the proposed rule at 70 FR 
41533 and Solicitor's Opinion M-36987 (December 5, 1996)). Congress 
clearly intended for agencies to recover processing costs in addition 
to bonuses, rents, and royalties.
    The IOAA states that Federal agencies should be ``self-sustaining 
to the extent possible,'' and authorizes agency heads to ``prescribe 
regulations establishing the charge for a service or thing of value 
provided by the agency.'' Section 304(a) of FLPMA specifically 
authorizes the Secretary of the Interior to ``establish reasonable 
filing and service fees and reasonable charges and commissions with 
respect to applications and other documents relating to the public 
lands.'' Circular A-25 sets forth a general policy that a user charge 
will be assessed against each identifiable recipient for special 
benefits derived from Federal activities beyond those received by the 
general public.
    A commenter said that other public land users who do not pay 
royalties should also pay processing costs.
    BLM has implemented or is considering implementing cost recovery 
for other programs that it administers.
    One commenter stated that, because much of the processing fees go 
toward satisfying other government regulations, as additional 
regulatory requirements are imposed and become part of BLM's 
processing, costs would continue to increase.
    We appreciate the commenter's concern. In the short term, potential 
new requirements would not affect BLM's fixed fees. Over the longer 
term, BLM may have to reassess the fixed fees if our processing costs 
change significantly. Although we do not foresee increased regulatory 
burdens that would significantly affect processing costs, case-by-case 
fees would include any such increases. It is important to note, 
however, that as technology and automation improve, our document 
processing costs may decrease, which will be reflected in reduced case-
by-case fees.
    Some commenters asserted that case-by-case fees are open-ended and 
contain no cap, which makes it difficult to plan for future costs. Some 
of these commenters asked how an applicant would know in advance 
whether they could afford to submit an application.
    Although case-by-case fees do not contain a prescribed cap, the 
process that BLM has established for case-by-case fees provides that 
cost estimates be given to applicants before processing begins. In 
advance of an application being submitted to BLM, an operator may also 
discuss the project with BLM and ask for cost projections. We expect 
that with time and experience, case-by-case fees will become more 
predictable.
    Some commenters are concerned that the rule provisions give BLM too 
much authority to convert fixed fees into case-by-case fees under the 
provision that allows BLM to change a document designated for a fixed 
fee to a case-by-case fee if BLM decides that it will have a unique 
processing cost. The commenters said that BLM might arbitrarily change 
the designation during processing and set a higher fee under the case-
by-case procedures. A commenter requested that, if possible, BLM 
identify fixed fees that will not be subject to case-by-case cost 
recovery.
    We do not agree that the rule gives BLM unlimited discretion to 
convert fixed fees into case-by-case fees. By ``unique processing 
costs,'' BLM means costs associated with a processing step that would 
result in significantly higher costs than are customary for that fixed-
fee category. When applied to certain fixed-fee categories, costs of 
efforts such as EISs, cultural resource surveys, or threatened or 
endangered species consultations and studies, may be considered unique 
because they are not usually required for actions in those categories. 
Although most fixed fees are not of a type that could incur unique 
processing costs, BLM cannot guarantee that any particular transaction 
cannot give rise to unique circumstances that would warrant case-by-
case processing. However, BLM has guidelines for determining when it 
takes actions such as those referenced above and will not decide that a 
document will require such processing steps unless those guidelines are 
satisfied. [FEDREG][VOL]*[/VOL][NO]*[/NO][DATE]*[/
DATE][RULES][RULE][PREAMB][AGENCY]*[/AGENCY][SUBJECT]*[/SUBJECT][/
PREAMB][SUPLINF][HED]*[/HED]
    If the applicant disagrees with BLM's determination that the 
application merits a case-by-case fee, the applicant may appeal that 
determination to IBLA under BLM's appeals process at 43 CFR part 4, 
subpart E, when it receives the cost estimate from BLM. In response to 
the commenters' concern, we have added language to the rule text 
clarifying that such a determination may be appealed. If the applicant 
prevails, BLM will refund the disputed fee and charge only the fixed 
fee.
    A commenter stated that, although estimated processing costs can be

[[Page 58859]]

appealed, he has no confidence in the ability of IBLA to process those 
cases expeditiously. The comment concluded that there is apparently no 
motivation for BLM or IBLA to move quickly on any appeals.
    With respect to appeals, there is little BLM can do to shorten the 
period between when an appeal is filed and when an appeal is resolved. 
However, the regulations provide that an applicant can ensure that BLM 
will continue processing the document and issue a decision while an 
appeal is pending by paying the disputed fee under protest.
    Some commenters contended that the fees would have a negative 
impact on small operators or miners. Some commenters said the proposed 
rule would have a negative impact on the national and local economies, 
especially as it relates to exploration, and will result in an increase 
in the number of energy and mineral projects being abandoned. They 
generally stated that higher fees would adversely affect mining 
industry ability to compete.
    The Record of Compliance that BLM prepared for the 2005 proposed 
rule concluded that, when mineral industry revenues are compared with 
the cost increases in this rule, the projected annual total for these 
increases amounts to less than one percent of sales. Even if the entire 
amount of the increases were to be borne by small business entities, 
the effects would be minimal. For example, under this rule, we project 
that small oil and gas operators will pay an additional $2 million 
annually, approximately, while generating sales of about $1 billion 
annually from operations on Federal lands. As a matter of prudence, 
operators will factor these fees into their business decisions before 
pursuing on-the-ground operations. In addition, for competitive 
leasing, these higher costs may be reflected in the successful bid.
    The increases in the fees paid by the applicants represent the 
direct economic impact of complying with the final rule. We estimate 
the cost of the rule, in the form of higher fees, will be approximately 
$7 million annually. We do not anticipate any measurable reduction in 
economic activity due to these fees.
    Several commenters said that BLM did not adequately consider the 
FLPMA factors when calculating the proposed fee increases, and 
challenged BLM's statement that the projects for which fees are charged 
in this rule usually provide little or no service to the public. A 
commenter stated that developers are involved in tremendous financial 
risks in producing minerals, and urged that the rule should consider 
the financial risks involved and potential positive benefits to the 
general public. Commenters stated that we did not consider various 
benefits of mining, including improved grazing land, improved wildlife 
habitat on reclaimed mine lands, and maintenance of trails that benefit 
recreational and subsistence users. Some commenters asserted providing 
heat and electricity to homes and businesses and other mineral uses are 
an obvious service and benefit to the public. A few commented that BLM 
should give applicants a credit for the data they produce, or reimburse 
them for providing it. A commenter concluded that BLM should include 
discussion of how these factors were considered in the final decision-
making process on the fee procedures.
    A commenter also discussed the importance of coal production and 
contended that because coal resources from Federal leases are vital to 
supplying electricity at a reasonable price and in an environmentally 
sound manner, BLM should not charge additional document processing 
costs. The commenter contended that a FLPMA factor mandates that BLM 
not impose additional processing costs for leasable minerals because 
the public receives significant benefit from lease revenues.
    BLM agrees that the domestic mining industry is vital to the 
American economy and provides immense benefits to the public. However, 
the FLPMA factor of ``service to the public'' concerns whether the 
applicant's project itself provides some significant direct service or 
benefit to the general public, not the fact that members of the public 
are the ultimate consumers of mineral resources extracted from the 
public lands (which is true of virtually all public land resources). 
Companies extracting resources from the public lands do not necessarily 
engage in extraction operations for the benefit of the public, but are 
for-profit enterprises. There is thus no basis for using the public's 
ultimate consumption of the resource as a reason for reducing 
processing fees below BLM's actual processing costs.
    BLM agrees that there are times when the applicant's project itself 
does result in tangible benefits to the public, such as the 
identification of cultural and archaeological sites in resource 
surveys, trail maintenance, and others mentioned above. For documents 
processed on a case-by-case fee basis, BLM will consider each of the 
FLPMA factors as it relates to that individual project. For the fixed 
fee documents, we considered the likelihood of activities in those 
categories providing substantial direct benefits to the public. We 
concluded that such potential benefits from transactions in the fixed 
fee categories are too speculative to warrant charging less than BLM's 
actual costs of processing, particularly when weighed against the 
monetary value of the project to the applicant.
    With regard to operators' financial risks, such investment risks 
and overhead costs of a for-profit entity operating on public land are 
normal costs of doing business and should not be a reason for BLM to 
collect less than its actual processing costs under the FLPMA 
reasonableness factors.
    Some commenters asserted that BLM's processing activities provide 
benefits to the general public such that BLM should charge less than 
its actual costs of processing. Some commenters also objected that many 
of BLM's processing activities benefit only the public and not the 
applicant.
    BLM disagrees. The processing fees charged in this rule are for the 
documents that an applicant must submit to satisfy various statutory 
and regulatory requirements pertaining to the various minerals programs 
that BLM administers. The processing of an application necessarily 
benefits the applicant. See 70 FR 41541. BLM considered the potential 
benefits to the public of its processing of the fixed fee documents in 
this rule and concluded that the monetary value to the applicant 
outweighs the possible benefit to the public.
    Several commenters were unclear how the fees relate to situations 
where the applicant directly pays a third party to perform required 
studies. Some commenters suggested that because they often pay third 
party contractors to perform required environmental studies, BLM should 
credit those costs by reducing the fees BLM charges.
    A credit is inappropriate because the fees in this rule do not 
include any costs that an applicant pays directly to a third party. For 
third party contracts, BLM's cost recovery is restricted to recovering 
the costs of its own activities, such as supervising the contractor, 
reviewing and approving the final document. If BLM pays for 
environmental studies in connection with its document processing, it 
will include those costs in its fee.
    Some commenters said that because the industry already pays for the 
privilege of operating on public lands by performing many studies and 
inventories, and compiling National Environmental Policy Act (NEPA) 
documents, the Federal Government

[[Page 58860]]

should consider reimbursing industry for performing these undertakings.
    BLM will not be reimbursing operators for studies they perform in 
compliance with various laws, mandates, and policies. All such costs 
are borne by the operator. The operator conducts these studies for 
their own benefit because an operator cannot receive a permit or 
authorization to extract resources from public lands until all required 
studies are completed. The operator does have the option of paying a 
BLM-permitted contractor to conduct these studies or they can ask BLM 
to conduct them at a charge to the operator.
    Some commenters contended that BLM must ensure efficient and timely 
processing and provide time frames within which it will complete 
processing. A commenter suggested that BLM undertake an independent 
review of the processes that are funded by these increased fees before 
they are implemented in the final rule.
    BLM recognizes that we have a responsibility to administer our 
programs in an efficient and effective manner, and review our 
procedures for processing applications to ensure their efficiency on an 
on-going basis. However, this is not a basis for delaying the 
implementation of this rule. Setting time frames for BLM processing is 
not part of this cost recovery rulemaking.
    A few commenters asked BLM to hold public meetings before 
finalizing any fee increases. Several commenters asked that we extend 
the comment period. Another commenter asked BLM to develop regulations 
governing minerals management programs with more industry involvement.
    BLM believes that adequate public involvement has occurred with 
respect to this rule. The original proposal, in December 2000, was very 
similar to this final rule, and the comment period at that time was 
open for over six months. We also provided a 30-day comment period for 
the July 2005 proposal.
    Some commenters said that BLM's current fees are much higher than 
those charged by local governments and private industry for similar 
services.
    BLM bases its fees on its own processing costs in conjunction with 
its consideration of the FLPMA reasonableness factors. Neither the 
states nor private industry has the same statutory responsibilities, as 
does BLM.
    A commenter said that use of a weighted average creates a situation 
where they are charged more than is necessary and that they should not 
be penalized if a BLM office is less cost efficient than another one. A 
commenter requested that BLM define ``weighted average'' and said that 
this mathematical cost basing leads to unequal application under the 
law and creates a cost structure slanted toward higher than necessary 
fees. A commenter asked what authority gives BLM the means to use a 
``weighted average'' instead of the actual or average cost.
    BLM relied on its regulatory authority in FLPMA (43 U.S.C. 1740) to 
determine the proper method of analysis. BLM used a weighted average 
for fixed fees to incorporate economies of scale achieved by offices 
that process many more documents than those with less active oil and 
gas (or other mineral) programs. The processing cost fees in this rule 
are based on a weighted average, rather than a simple average, of BLM-
wide processing costs for each type of document. This method gave 
greater weight to the processing cost data from field offices having a 
heavy workload, and thus more expertise, in processing a particular 
type of document. Offices that process a greater number of a particular 
type of document generally have a lower processing cost per document of 
that type. We first estimated the actual cost for a type of document 
and then considered each of the FLPMA factors to see if any of them 
might cause a fee to be set at less than actual cost. We then decided 
the amount of the fee, which cannot be more than our processing cost.
    A commenter said that BLM failed to set reasonable ground rules 
like limits on dollars per hour for BLM staff to work on administering 
the project.
    BLM will base case-by-case fees on the actual costs incurred in 
processing the application. Before processing begins, BLM will provide 
the applicant with an estimate of BLM's costs and its key components. 
The applicant will have an opportunity to object if it believes the 
estimated costs are excessive.
    A commenter asked why there are differences in costs among BLM 
State Offices for the same program elements and services. Another 
commenter asked how BLM's processes can be ``reasonably efficient'' 
when BLM's preliminary review of the data showed large cost differences 
among BLM offices for processing certain types of documents as well as 
large numbers of documents filed and processed.
    As stated in the proposed rule preamble, BLM determined that the 
differences in costs cited by the commenters were attributable to site-
or sale-specific factors or economies of scale.
    Some commenters said that BLM was attempting to circumvent the 
budgeting process by burdening industry with additional fees and 
increasing existing fees as much as 15 times the current fee.
    BLM is not circumventing the budgeting process. Congress authorized 
BLM to recover processing costs under the IOAA and FLPMA, and OMB 
directives require us to do so. The IOAA states that Federal agencies 
should be self-sustaining to the extent possible and authorizes agency 
heads to ``prescribe regulations establishing the charge for a service 
or thing of value provided by the agency.'' Section 304(a) of FLPMA 
specifically authorizes the Secretary of the Interior to ``establish 
reasonable filing and service fees and reasonable charges and 
commissions with respect to applications and other documents related to 
the public lands.'' The IOAA and FLPMA give BLM authority to charge 
fees for processing applications. Moreover, Circular A-25 provides that 
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.
    A commenter stated that BLM went too far beyond what is reasonable 
in setting the proposed fees beyond the fees established in previous 
regulations.
    BLM disagrees. The prior filing fees were more in the nature of a 
recordation fee, and were not intended to recover BLM's processing 
costs.
    Several commenters argued that BLM's proposed cost recovery 
regulations are flawed because they rely on an incorrect legal 
conclusion in Solicitor's Opinion M-36987 (December 5, 1996) that cost 
recovery is mandatory under FLPMA and the IOAA.
    The commenters are mistaken. The Solicitor's Opinion did not 
conclude that those statutes require cost recovery, nor did BLM's 
preamble to the proposed rule characterize the Opinion's conclusion as 
such. Solicitor's Opinion M-36987 concluded that ``BLM has authority 
under applicable statutory and case law to recover costs of minerals 
document processing * * *. Because it has this authority and because 
the Departmental Manual and OMB policy require that costs be recovered 
where possible, BLM should take steps to initiate cost recovery * * 
*.''
    Commenters also maintained that the Department mistakenly relies on 
the BLM Manual to create a mandatory cost recovery obligation.
    By ``BLM Manual,'' we assume the commenters meant to refer to the 
Departmental Manual, which was cited in both the Solicitor's Opinion 
and the proposed rule preamble. The commenters' objection that the 
Manual does not have the force or effect of law

[[Page 58861]]

and cannot override a Federal statute misses the point. As explained in 
the preamble to the proposed rule, Congress has authorized cost 
recovery in both the IOAA and FLPMA. The executive branch, through 
Circular A-25, has stated the general Federal policy to be that charges 
will be assessed against identifiable recipients of special benefits. 
The Secretary of the Interior, in the Departmental Manual, has 
instructed bureaus and offices within DOI to recover costs that they 
are authorized to recover. There is no issue here of a conflict between 
the Departmental Manual and statutory authority--the Manual, the OMB 
guidance, and the statutes are all in accord. Nor is there any issue, 
as the commenters assert, of BLM interpreting the Manual as directing 
it to disregard one of the FLPMA factors. As explained in the preamble 
to the proposed rule, BLM carefully considered each of the FLPMA 
factors in setting the proposed fees.
    One commenter asserted that BLM appears to rid itself of its 
responsibility to prepare any special studies as outlined in NEPA and 
stated that BLM must maintain the necessary staff and resources to 
perform NEPA requirements.
    BLM recognizes that it has continuing responsibilities to satisfy 
its requirements under NEPA. The provision in section 3000.11(b) simply 
allows the applicant to ask BLM's approval to do studies or other 
activities, under BLM supervision and to BLM standards, on a voluntary 
basis. If the applicant chooses not to do the work, BLM will perform 
the work and include the cost in the case-by-case fee. Nothing in these 
regulations relieves BLM from fulfilling any of its statutory 
responsibilities.
    One commenter expressed concern that the fee increases will 
adversely affect academic interests involved in fossil research.
    The cost recovery provisions apply to applications for certain 
commercial activities. Academic interests involved in fossil research, 
including collectors of petrified wood under 43 CFR subpart 3622 and 
other kinds of researchers under 43 CFR part 2930, will not be affected 
by this rule.
    A few commenters stated that BLM should not be pursuing a prior 
administration's agenda or initiative.
    The changes in this final rule do not represent the agenda of any 
particular administration. BLM's efforts to recover costs were 
initiated in response to recommendations from the OIG in 1988, as part 
of a 1980s Presidential initiative calling for all Federal agencies to 
charge appropriate user fees for agency services.
    A commenter asked if BLM had considered implementing electronic 
filings of ownership transfers before implementing a new fee schedule.
    BLM intends ultimately to implement electronic filings for title 
transfers. We will then review the processing costs and adjust them as 
necessary. This is not a reason to delay implementation of this rule.
    A commenter said that the rule could be abused in its 
implementation by BLM offices seeking to delay or deny permit 
applications, including those that state regulatory agencies handle 
expeditiously.
    The comment is speculative. We have carefully explained how the 
fees will be implemented in accordance with applicable authority. These 
fees will not be used to delay any BLM action unnecessarily.
    A commenter said it is unclear what, if any, BLM costs other than 
land use plan studies and programmatic environmental assessments (EAs) 
were exempted from the rule.
    BLM intends this rule to provide for the collection of document-
specific costs rather than programmatic costs.
    A commenter said that if BLM proceeds with this rule, it must 
ensure that all management overhead is excluded, citing Nevada Power 
Co. v. Watt, 711 F.2d 913, 931 (10th Cir. 1983).
    BLM's actual costs are the sum of both direct and indirect costs. 
However, under FLPMA, BLM cannot recover the costs of management 
overhead. We have interpreted this to mean the 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. We have not 
excluded the costs of Deputy State Directors or other supervisory staff 
because they are typically involved in day-to-day decision making. 
BLM's cost accounting system is intended to reflect this distinction.
    One commenter noted that it appeared that BLM was attempting to 
``double-dip'' by assessing both an application fee and a filing fee. 
Another commenter noted that BLM was only assessing application and 
filing fees for some actions and questioned why BLM was not collecting 
the processing fee for those same actions.
    Some commenters seem to have misunderstood how BLM structured the 
fixed fees. Some fixed fees were already-existing, nominal filing fees 
that we did not propose to change. Filing fees serve to limit filing to 
serious applicants and are not intended to reimburse processing costs. 
This rule adds certain fixed fees for other documents based on BLM's 
processing costs. Each action for which this rule charges a fee has 
either a filing fee or a processing fee. No action has both a filing 
fee and a cost recovery processing fee. We may in the future change 
some filing fees to processing fees. As explained in the preamble to 
the proposed rule, BLM intends to continue to work on establishing and 
collecting fees for other documents (70 FR 41533).
    Some commenters stated that these provisions appear to create 
further delays in an already time consuming set of procedures. A 
commenter stated that at a minimum the final regulations should include 
provisions to establish an escrow-type account that BLM can access. A 
commenter recommended that BLM add the following language to proposed 
section 3000.11: ``You may elect to establish a standing contingency 
fund to be accessed and utilized by BLM in case of shortfall, to assure 
that processing continues. Provisions for appeals and fees paid under 
protest in subsection (c)(6) will apply equally to any funds utilized 
from such an account.''
    This rule does not provide for escrow or contingency accounts to 
facilitate payments of case-by-case fees. However, based on these 
comments, we have amended the language of section 3000.11(b)(4)(i) to 
clarify that we will not stop ongoing processing if we re-estimate the 
costs associated with a case-by-case document. This revision should 
reduce potential delays associated with re-estimation of costs.
    The commenter also asked BLM to consider that cost recovery should 
be limited to the costs of the actual hours that BLM staff worked 
directly on the project being charged and specifically should exclude 
any staff training.
    The preamble to the proposed rule explained what costs BLM includes 
in determining its fees in this rule. Both direct and indirect costs 
are included. Training is only included to the extent that it is 
allowable as indirect costs.
    One commenter asked that BLM consider dedicating funds collected 
from increased fees to paying personnel who process the permits for 
which the fees are levied. The commenter said that BLM staff that is 
responsible for the minerals permitting process should not have other 
assignments within their respective offices.
    BLM intends to structure its budget processes to return fees 
collected to the BLM office which processes the actions. BLM staff 
workload is determined by the needs of individual BLM offices.
    One commenter asked for further explanation of the relationship 
between

[[Page 58862]]

existing Federal fees, assessments, and levies and the proposed 
charges, asserting that existing fees already cover certain BLM 
document processing costs. Specifically, the commenter contended that 
net smelter royalties, other Mining Law Administration Program (MLAP) 
funds, and bonus bid payments that cover document processing costs 
should essentially be counted as document processing fees, and that BLM 
should not seek additional revenue from applicants if double recovery 
of such fees would occur.
    As discussed earlier in this preamble, we have addressed the 
relationship between royalties, bonus bids, rents, and the processing 
fees in this rule. We address here the relationship between the 
processing fees and Mining Law fees, such as the annual maintenance fee 
on unpatented mining claims and the location fee on new claims.
    Moneys that Congress has directed BLM to collect as location and 
maintenance fees are deposited directly to the Treasury and are to be 
used as an offset to BLM's appropriation, up to a certain ceiling. The 
purpose for the maintenance fee is to replace the $100 assessment work 
requirement in the Mining Law. The assessment work requirement was 
intended to show a mining claimant's bona fides in exploring for or 
developing minerals. Similarly, the location fee is intended to 
discourage speculative filings of mining claims. Consequently, the 
fundamental purpose for those fees is not for cost recovery.
    The Interior Department's appropriation act specifies two purposes 
for which BLM can use mining claim fees. First, Congress has directed 
that a set amount of mining claim fees be used to cover the costs of 
administering the mining claim fee program. The mining claim fee 
program is the program under which BLM collects and processes the $125 
claim maintenance fee and the location fee. We did not propose and have 
not adopted any additional processing fee for collecting and processing 
the statutory mining claim fees. Although the terminology may appear 
similar (the word ``location'' is used in both), the fee this rule 
imposes for processing location notices is intended to cover BLM's 
processing costs related to the statutory filing requirement imposed by 
FLPMA Section 314 (43 U.S.C. 1744), and is unrelated to the collection 
of the statutorily imposed location fee.
    Second, Congress has directed that the bulk of the appropriation 
that is offset by mining claim fees be used for the MLAP generally This 
appropriation has averaged approximately $34 million a year for the 
past few years, and is used for the entire range of administrative 
costs incurred by the MLAP; it has historically been inadequate to 
operate all aspects of the program. In the past, BLM has used 
appropriated funds to cover the processing costs of documents when no 
processing fees were being charged. The fact that general Mining Law 
Program funds were used to cover these costs in the past, however, does 
not mean that these costs ``should'' be funded from those collections, 
or that BLM cannot now exercise its statutory authority to charge a 
specific processing fee to cover certain document processing costs. 
When general Mining Law Program funds no longer have to be directed to 
cover all processing costs, they can and will be directed to cover 
other aspects of the program.
    The commenter also stated that because claim maintenance fees and 
location fees generate millions of dollars, which will increase as fees 
are increased, BLM should re-evaluate the need to impose additional 
processing fees.
    As is the case with royalties, bonus bids, and rents, Congress 
imposes claim maintenance and location fees for purposes different from 
covering the costs of document processing. BLM cannot predict how much 
money will be collected from these statutory fees or the size of future 
Congressional appropriations for Mining Law administration. In the IOAA 
and FLPMA, Congress has also separately authorized the collection of 
fees to cover the costs of document processing. Those fees are the ones 
that will be collected under this rule.
    One commenter objected to BLM charging for pending documents where 
processing has already begun. The commenter asserted that charging new 
fees on pending documents would constitute an unlawful retroactive 
application of new requirements. The commenter also asserted that 
equitable concerns arise regarding such charges since the charges could 
not have been anticipated and planned for in the planning phase of the 
action. In addition, the commenter stated that often the applicant has 
no control over the pace of document processing, and thus would be 
unfairly punished due to BLM's processing backlogs.
    As discussed earlier in this preamble, BLM will apply both fixed 
and case-by-case fee provisions in this final rule to applications 
submitted after the effective date of this rule, and not to 
applications pending on that date. Although BLM disagrees with the 
characterization of the proposed regulations as retroactive, BLM is 
sensitive to practical concerns relating to applying this rule to 
pending applications, as well as perceived inequities, and has revised 
the rule accordingly.
    Another commenter stated that any cost reimbursement policy should 
prohibit the imposition of significant new processing fees upon the 
lessee or operator of an existing lease, other than future minor filing 
fees, for specific actions such as processing right-of-way 
applications. The commenter asserted that at the time existing leases 
were bid upon and issued, BLM represented by implication and conduct 
that fees would be imposed under existing law and regulation only for 
certain activities, such as rights-of-way, and that other 
administrative costs associated with existing leases were reasonably 
expected to be borne by BLM. The commenter concluded that lessees' bids 
reflected those assum