CHAPTER 23 COAL AND SOLID LEASABLE MINERAL BONDING GUIDELINES

• Jurisdiction: United States

Federal Royalty Revolution--Coal
(Nov 1986)
CHAPTER 23
COAL AND SOLID LEASABLE MINERAL BONDING GUIDELINES

Instruction Memorandum No. 86-145

Expires 9/30/86

To: All SD's

From: Director

Subject: Coal and Solid Leasable Mineral Bonding Procedures

Enclosed are revised procedures for setting lease bond amounts for coal and solid leasable minerals. These procedures have been developed by the Division of Solid Mineral Operations (WO-660) with Field input to address the critical need for nationally uniform standards for solid mineral lease bonds. This material will be incorporated into the Bureau's manual system as soon as the immediate need to ensure a consistent approach in the most sensitive program areas through this short-term format has been satisfied.

It should be noted that a priority for implementation is set out in the procedures, with producing coal leases with readjustments either under protest or appeal to be given first priority. Your special attention is requested for this class of leases with the revenue implications of ensuring establishment of a bond amount sufficient to cover the difference between pre-readjustment and post-readjustment royalties.

Please ensure that the new procedures are implemented for all leases in your State not later than March 3, 1986. When your State's leases have been examined and bonds adjusted in accordance with these procedures, please ensure that a representative of your State calls Bill Stringer (WO-660) at FTS 343-7753

The Bureau's bonding policy task force is addressing Bureau-wide bonding procedures. When that task force's recommendations have been approved by the Bureau this Instruction Memorandum will be revised as appropriate.

John E. Latz

Deputy Director, Energy and Mineral Resources

1 Enclosure:

Encl. 1 — Coal and Solid Mineral Bonding Procedures (8 pp)

[Page 23-2]

Bureau of Land Management

Solid Mineral Operations Division

Coal and Solid Mineral Bonding Procedures

The Memorandum of Understanding between the Bureau of Land Management (BLM) and the Minerals Management Service (MMS) establishes BLM as the sole and final agency responsible for setting, accepting, terminating, and making demands against Federal lease bonds for onshore Federal leases (see BLM-MMS MOU, Attachment A, Section II.D.1-5). The MMS may request that a demand be made against the lease bond to aid in revenue collection (see Attachment A, Section II.D.5, Remarks). The BLM-MMS MOU recognizes that the Federal lease bond covers both compliance with the established requirements and royalty payment indemnity. The BLM...