U.S. DEPARTMENT OF THE INTERIORBUREAU OF LAND MANAGEMENT
 
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UNITED STATES DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT
WASHINGTON, D.C. 20240
http://www.blm.gov/
October 31, 2013
 
In Reply Refer To:
3809 (320) P
 
EMS TRANSMISSION 11/05/2013
Instruction Memorandum No. 2014-009       
Expires:  09/30/2015                                                                                      
 
To:                  All Field Office Officials                       
 
From:              Assistant Director, Minerals and Realty Management    
 
Subject:          State Director Bond Review Certification Process                     DD: 12/31/2013
 
Program Area: Mining Law Administration, 43 CFR 3809 Surface Management.
 
Purpose: This Instruction Memorandum (IM) provides guidance regarding the State Director Bond Review Certification Process for 43 CFR 3809.500 Surface Management Financial Guarantee Requirements for bonds and financial assurances. 
 
Policy/Action: Bureau of Land Management (BLM) Manual MS-3809, Surface Management, requires State Directors to certify annually to the Director that all reclamation cost estimates requiring review and financial guarantees are adequate to meet the requirements of the regulations.  This IM serves to clarify roles and responsibilities for the State Director Bond Review process and includes specific procedures for the State Director Bond Certification process (attachment 1). BLM Handbook H-3809-1, Surface Management, Chapter 6 provides procedures for reviewing and determining the adequacy of reclamation cost estimates. 
 
Effective immediately, State Directors will certify annually to the Assistant Director, Minerals and Realty Management, on behalf of the Director, that the district and field offices in their jurisdiction have developed office-wide strategies to reduce the number of expired Notices. The district and field offices will develop these strategies with the primary purpose to reduce those Notices that have been expired for more than 36 months as of October 1 of the subject fiscal year. The “Expired Notices” section of the Legacy Rehost 2000 (LR2000) Bond Review Report identifies these Notices.  
 
Roles and responsibilities for the State Director Bond Review Certification process are as follows: 
District/Field Manager: At the end of each fiscal year, the District/Field Manager will:  
  • Review the LR2000 Bond Review Report to determine if the district/field staff examined all reclamation cost estimates requiring review and financial guarantees are adequate to meet the requirements of the regulations. If the Bond Review Report indicates that the BLM has not reviewed a reclamation cost estimate within the appropriate timeframe (see H-3809-1 §6.2.4, Periodic Reviews) or the reclamation cost estimate is inadequate, then the district or field office must develop a Corrective Action Plan (attachment 2) to address the deficiencies.  The district or field office will place the Corrective Action Plans in the subject case file and prepare an office-wide summary of the Corrective Action Plans (attachment 3, Corrective Action Plan Summary). 
  • Develop an Expired Notice Reduction Strategy (attachment 4) to reduce the number of expired Notices that have been expired for more than 36 months as of October 1 of a given fiscal year. The office-wide strategy will provide procedures that the district/field office will implement in the upcoming fiscal year to reduce the number of expired Notices. Actions specific to any given notice are not necessary but may be helpful to articulate specific actions for later implementation. District/Field Managers will provide the strategy to the State Director during the annual certification process.  
  • Certify, at a time specified by the State Director, to the State Director that the district/field office examined all reclamation cost estimates requiring review and financial guarantees are adequate to meet the requirements of the regulations. Include a copy of the Corrective Action Plan Summary and the Expired Notice Reduction Strategy.  
State Director:  Between October 1 and December 1 of each year, the State Director will: 
  • Receive district/field office certifications and ensure that the district/field offices examined all reclamation cost estimates requiring review and financial guarantees are adequate to meet the requirements of the regulations. State Directors will ensure that all district/field offices have submitted an Expired Notice Reduction Strategy. 
  • Review district/field office certifications and strategies to determine compliance with BLM policy. State Directors will reject and return for modification any certification or strategy that does not meet the policy set forth in this IM.   
  • Submit a memorandum to the BLM Assistant Director, Minerals and Realty Management by December 1, certifying that the district and field offices examined all reclamation cost estimates requiring review and financial guarantees are adequate to meet the requirements of the regulations (attachment 5, Certification Memorandum). State Directors will include, with the certification, a copy of each district/field office’s Corrective Action Plan Summary and Expired Notice Reduction Strategy. 
Assistant Director: The Director, through the Assistant Director, Minerals and Realty Management, provides oversight over the State Director Bond Review Certification process, and requires programmatic review when necessary. The Assistant Director, Minerals and Realty Management, will receive and review all certifications to determine compliance with BLM policy. The Assistant Director may reject and return for modification any certification that does not meet the policy set forth in this IM.  
 
The LR2000 Bond Review Report, dated October 1 or first following business day, is the official record for the certification process. 
 
Timeframe: This IM is effective immediately and remains in effect unless formally modified. For fiscal year 2013 only, the State Director Certification Memorandum must be in the Washington Office by December 31, 2013, due to Federal Government Shutdown that occurred during October. For future years after fiscal year 2013, the due date will remain as December 1.
 
Budget Impact: There will be minimal budget impact, but there is no estimate at this time.
 
Background: The revised surface management regulations (43 CFR 3809) became effective on January 20, 2001, with subsequent amendments that took effect through December 31, 2001.  The final regulations require all Notices and Plans of Operations to post full-cost financial guarantees in an amount sufficient to allow the BLM to contract a third party to reclaim the operations according to 43 CFR 3809.552(a).
 
In June 2005, the General Accounting Office (GAO) completed a review of the BLM’s surface management financial guarantee program.  The GAO report recommended the BLM take several actions.  In response to these recommendations, the BLM issued WO-IM-2006-172, requiring each state office to generate a Bond Review Report (LR2000). BLM State Directors certify that the district and field offices in their jurisdiction have reviewed reclamation cost estimates and financial guarantees for Plans of Operation and Notices within regulatory and policy timeframes, and developed a Corrective Action Plan to address any deficiencies. 
 
This IM requires District/Field Managers to provide bond review certification to the State Director. District Managers have the authority and responsibility to manage activities conducted under 43 CFR 3809 (see BLM Manual MS-1203, Delegation of Authority). The certification process, specifically the development of a Corrective Action Plan, requires direct knowledge of the operations. This policy clarifies that the District Manager is responsible for certification and the development of Corrective Action Plans for operations within their districts.  
 
Under this policy, the district/field office is also required to provide an office-wide strategy for reducing the number of Notices that have been expired for greater than 36 months. In its May 2012 report entitled, “Uranium Mining - Opportunities Exist to Improve Oversight of Financial Assurances,” GAO noted a large number of lingering expired Notices added to the BLM’s total reclamation liability. GAO recommended that the BLM begin to track reclamation liabilities associated with expired Notices and include such tracking within the annual State Director Bond Review Certification process. The BLM has added a new section entitled “Expired Notices” to the LR2000 Bond Review Report for this purpose.  
 
Manual/Handbook Sections AffectedThis IM transmits interim policy that the BLM will incorporate into MS-3809 at Section 1.4 during the next revision.
 
Coordination: This IM was coordinated with the Division of Solid Minerals and the Office of the Director.
 
ContactIf you have any questions or concerns regarding this policy, please contact me at 202-208-4201, or your staff may contact Mitchell Leverette, Division Chief Solid Minerals (WO-320) at 202‑912‑7113 or Adam Merrill, Geologist (WO-320) at 202-912-7044.
 
 
Signed by:                                                        Authenticated by:
Michael Nedd                                                    Robert M. Williams
Assistant Director                                             Division of IRM Governance,WO-860
Minerals and Realty Management
 
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Last updated: 11-07-2013