Daily Rules, Proposed Rules, and Notices of the Federal Government
* Electronically go to
* Mail comments to Hyla Hurst, Regulatory Specialist, Office of Natural Resources Revenue, P.O. Box 25165, MS 64000A, Denver, Colorado 80225. Please reference ICR 1012-0006 in your comments.
* Hand-carry comments or use an overnight courier service. Our courier address is Building 85, Room A-614, Denver Federal Center, West 6th Ave. and Kipling St., Denver, Colorado 80225. Please reference ICR 1012-0006 in your comments.
If ONRR determines that a lessee has not properly reported or paid, we may issue an order to pay additional royalties, a Notice of Noncompliance, or a Civil Penalty Notice requiring correct reporting or payment. Lessees then have a right to appeal those ONRR actions.
Regulations at 30 CFR part 1243 govern the submission of appropriate surety instruments to suspend compliance with orders or decisions and to stay the accrual of civil penalties (if the Office of Hearings and Appeals grants a lessee's petition to stay accrual of civil penalties), pending administrative appeal for Federal and Indian leases. For Federal oil and gas leases, under 30 U.S.C. 1724(l) and its implementing regulations in 30 CFR part 1243, appellants who are requesting a suspension without providing a surety may submit information to demonstrate financial solvency. This ICR covers the burden hours associated with submitting financial statements or surety instruments required to stay an ONRR order, decision, or accrual of civil penalties.
Title 30 CFR 1243.1 explains how lessees or recipients of ONRR orders may suspend compliance with an order if they appeal in accordance with 30 CFR part 1290. Pending appeal, ONRR
The ONRR accepts the following surety types: Form ONRR-4435, Administrative Appeal Bond (formerly Form MMS-4435); Form ONRR-4436, Letter of Credit (formerly Form MMS-4436); Form ONRR-4437, Assignment of Certificate of Deposit (formerly Form MMS-4437); Self-bonding; and U.S. Treasury Securities.
When an appellant selects and puts one of the surety types in place, the appellant must maintain the surety until completion of the appeal. If the appeal is decided in favor of the appellant, ONRR returns the surety to the appellant. If the appeal is decided in favor of ONRR, then we may take action to collect the total amount due or draw down on the surety. We draw down on a surety if the appellant fails to pay or fails to comply with requirements relating to amount due, timeframe, or surety submission or resubmission. Whenever ONRR must draw down on a surety, we must draw down the total amount due, which is defined as unpaid principal plus the interest accrued to the projected receipt date of the surety payment. Appellants may refer to the Surety Instrument Posting Instructions, which are on our Web site at
Appellants may file Form ONRR-4435, Administrative Appeal Bond, which ONRR uses to secure the financial interests of the public and Indian lessors during the entire administrative and judicial appeal process. Under 30 CFR 1243.4, appellants must submit their contact and surety amount information on the bond to obtain the benefit of suspension of an obligation to comply with an order. A surety company that the U.S. Department of the Treasury approves (see Department of the Treasury Circular No. 570, as revised periodically in the
Appellants may choose to file Form ONRR-4436, Letter of Credit (LOC), with no modifications. Requirements at 30 CFR 1243.4 continue to apply. A bank with a minimum Fitch rating of “C” must notarize and issue the LOC for appellants for a LOC of less than $1 million; “B/C” for a LOC between $1 million and $10 million; or “B” for a LOC over $10 million. A Fitch rating is a bank rating provided by Fitch, Inc., and is available at
The appellant is responsible for verifying that the bank provides a current Fitch rating to ONRR. If the issuing bank's rating falls below the minimum acceptable level, the appellant must submit a satisfactory replacement surety within 14 days or ONRR will draw down the existing LOC. If the bank issuing the LOC chooses not to renew the existing LOC, it must provide ONRR with a notice of its decision not to renew 30 days prior to expiration of the LOC. After the appeal concludes, ONRR may release and return the LOC to the appellant or collect payment on the LOC. If collection is necessary for a remaining payment balance, ONRR will issue a demand for payment, which includes all interest assessed on the affected bill, to the bank with a notice to the appellant.
Appellants also may choose to secure a debt using a Certificate of Deposit (CD) from their bank and by submitting Form ONRR-4437, Assignment of Certificate of Deposit. Appellants must file the request with ONRR prior to the invoice due date. We will accept only a book-entry CD that explicitly assigns the CD to the ONRR Director. The CD must be issued by a bank with the minimum required Fitch rating or be confirmed by a bank with an acceptable rating. The acceptable ratings for a CD are the same as for a LOC discussed above. If collection of the CD is necessary for a payment balance, ONRR will return unused CD funds to the appellant after total settlement of the appealed issues including applicable interest charges.
For Federal oil and gas leases, regulations at 30 CFR 1243.201 do not require a surety instrument when an appellant periodically demonstrates, to the satisfaction of ONRR, that the guarantor or appellant is financially solvent or otherwise able to pay the obligation. Appellants must submit a written request to “self-bond” every time a new appeal is filed. To evaluate the financial solvency and exemption from requirements of appellants to maintain a surety related to an appeal, ONRR requires appellants to submit a consolidated balance sheet subject to annual audit. In some cases, we also require copies of the most recent tax returns (up to 3 years) filed by appellants.
In addition, appellants must annually submit financial statements subject to annual audit to support a minimum net worth of $300 million. The ONRR uses the consolidated balance sheet or business information supplied to evaluate the financial solvency of a lessee, designee, or payor seeking to demonstrate financial solvency to stay its payment obligation pending appeal. If appellants do not have a consolidated balance sheet documenting their net worth or if they do not meet the $300 million net worth requirement, ONRR selects a business information or credit reporting service to provide information concerning an appellant's financial solvency. We charge the appellant a $50 fee each time we need to review data from a business information or credit reporting service. The fee covers our costs to determine an appellant's financial solvency.
Appellants may choose to secure their debts by requesting to use a U.S. Treasury Security (TS). Appellants must file a letter of request with ONRR prior to the invoice due date. The TS must: (1) Be a U.S. Treasury note or bond with maturity equal to or greater than 1 year; (2) 120 percent of the appealed amount plus 1 year of estimated interest (necessary to protect ONRR against interest rate fluctuations); and (3) be a book-entry TS. Book-entry securities are securities that are recorded in electronic records rather than as paper certificates.
We are requesting OMB's approval to continue to collect this information. Not collecting this information would limit the Secretary's ability to discharge the
The ONRR protects proprietary information submitted under this collection. We do not collect information of a sensitive nature in this ICR. A response is mandatory in order to suspend compliance with an order pending appeal.
To comply with the public consultation process, we published a notice in the
If you wish to comment in response to this notice, you may send your comments to the offices listed under the