View all text of Subchapter II [§ 1731 - § 1736]
§ 1735. Delegation of royalty collections and related activities
(a) Authorization of Secretary
Upon written request of any State, the Secretary is authorized to delegate, in accordance with the provisions of this section, all or part of the authorities and responsibilities of the Secretary under this chapter to:
(1) conduct inspections, audits, and investigations;
(2) receive and process production and financial reports;
(3) correct erroneous report data;
(4) perform automated verification; and
(5) issue demands, subpoenas, and orders to perform restructured accounting, for royalty management enforcement purposes,
to any State with respect to all Federal land within the State.
(b) Prerequisites
After notice and opportunity for a hearing, the Secretary is authorized to delegate such authorities and responsibilities granted under this section as the State has requested, if the Secretary finds that—
(1) it is likely that the State will provide adequate resources to achieve the purposes of this chapter;
(2) the State has demonstrated that it will effectively and faithfully administer the rules and regulations of the Secretary under this chapter in accordance with the requirements of subsections (c) and (d) of this section;
(3) such delegation will not create an unreasonable burden on any lessee;
(4) the State agrees to adopt standardized reporting procedures prescribed by the Secretary for royalty and production accounting purposes, unless the State and all affected parties (including the Secretary) otherwise agree;
(5) the State agrees to follow and adhere to regulations and guidelines issued by the Secretary pursuant to the mineral leasing laws regarding valuation of production; and
(6) where necessary for a State to have authority to carry out and enforce a delegated activity, the State agrees to enact such laws and promulgate such regulations as are consistent with relevant Federal laws and regulations
with respect to the Federal lands within the State.
(c) Ruling as to consistency of State’s proposal
(d) Promulgation of standards and regulations with respect to delegation
After consultation with State authorities, the Secretary shall by rule promulgate, within 12 months after August 13, 1996, standards and regulations pertaining to the authorities and responsibilities to be delegated under subsection (a), including standards and regulations pertaining to—
(1) audits to be performed;
(2) records and accounts to be maintained;
(3) reporting procedures to be required by States under this section;
(4) receipt and processing of production and financial reports;
(5) correction of erroneous report data;
(6) performance of automated verification;
(7) issuance of standards and guidelines in order to avoid duplication of effort;
(8) transmission of report data to the Secretary; and
(9) issuance of demands, subpoenas, and orders to perform restructured accounting, for royalty management enforcement purposes.
Such standards and regulations shall be designed to provide reasonable assurance that a uniform and effective royalty management system will prevail among the States. The records and accounts under paragraph (2) shall be sufficient to allow the Secretary to monitor the performance of any State under this section.
(e) Revocation; issuance of demand or order by Secretary
(f) Compensation to State for costs of delegation; allocation of costs
(g) Judicial review
(h) Existing delegation
(Pub. L. 97–451, title II, § 205, Jan. 12, 1983, 96 Stat. 2459; Pub. L. 104–185, § 3(a), Aug. 13, 1996, 110 Stat. 1702.)