§1735 Delegation of Royalty Collections and Related Activities

Summary

The Secretary can give a State, if the State asks in writing, some or all powers to handle royalty work on all federal land in that State. Those powers can include inspections, audits and investigations; taking and processing production and financial reports; correcting wrong report data; running automated checks; and issuing demands, subpoenas, or orders for restructured accounting to enforce royalty rules. The Secretary may do this only after notice and a hearing and only if the Secretary finds the State will likely provide enough resources, will follow federal rules, will not place an unreasonable burden on lessees, will use standard reporting unless everyone agrees otherwise, will follow federal valuation rules, and will pass any needed state laws or regulations that match federal law. The Secretary must rule on a State’s proposal within 90 days after it is submitted. The Secretary had to make standards and rules within 12 months after August 13, 1996, covering audits, records, reporting, data corrections, automated checks, avoiding duplicate work, sending report data to the Secretary, and enforcement orders. If a State breaks the rules, the Secretary can revoke the delegation after notice and a hearing and may step in to issue a demand or order if money to the United States might be lost. Subject to available funds, the Secretary will pay States needed costs at least quarterly, but not more than what it would cost the Secretary to do the work. The Secretary’s approval or denial can be reviewed in the U.S. district court that includes the State capital. Delegations already operating on August 13, 1996 may continue unless changed under these rules.