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December 27, 2007
In Reply Refer To:
3100 /310 P
Instruction Memorandum No. 2008-043, Change 1
Expires:  09/30/2009

To:                All State Directors

From:            Assistant Director, Minerals, Realty and Resource Protection

Subject:         Additional Interim Guidance for New Application for Permit to Drill (APD) Processing Fee  

Program Area: Oil and gas operations. 

Purpose: This memorandum provides additional interim guidance for handling the new $4,000 APD processing fee required by the Fiscal Year (FY) 2008 Consolidated Appropriations Act (The Act).  This Instruction Memorandum (IM) is intended to provide interim guidance on how this fee is to be collected and handled, until more expansive guidance can be developed and issued.
Policy/Action: Beginning on December 26, 2007, every new APD (including those on Indian Minerals) is to be accompanied by a processing fee in the amount of $4,000.  This fee applies to any APD, that is, Form 3160-3, whether submitted individually or as part of a Master Development Plan. The fee is not required for a Notice of Staking, but is required to be submitted with any subsequent Form 3160-3.  Any APD not accompanied by this processing fee shall not be accepted until the operator makes the required payment. While the APD does not
need to be returned, no processing should take place until the fee is received.
We suggest that Field Offices send the APD Applicants a letter advising them of the new requirement and giving them 10 business days to provide the processing fee. The following is suggested language to include in such a letter or any future letters:
The Fiscal Year 2008 Consolidated Appropriations Act requires a $4,000 processing fee for each Application for Permit to Drill (APD). This requirement became effective on December 26, 2007, when the Act was signed by the President. On (date), you submitted XXX APDs which did not include this processing fee. We are holding your APDs in abeyance to provide you an opportunity to submit the fee. If we do not receive the processing fee, in the amount of $4,000 for each APD, within 10 business days from the date of this letter, your APDs will be returned.
Collected funds are to be held in a suspense account using the Collection and Billing
System’s protocol as follows:
Commodity – OIL & GAS
Further guidance on where to send this fee will be forthcoming.
Timeframe: This guidance is effective for the remainder of this FY.
Budget Impact: There is no impact on the budget.
Background: The Act establishes funding for the Bureau of Land Management (BLM), as well as direction from Congress on our activities for FY 2008.  The requirement in the Act for an APD processing fee takes effect immediately, thus requiring interim guidance to implement the processing fee and how to handle the monies.  Final guidance will be developed over the next several weeks.
As much as possible, we want to handle this new processing fee and the APDs within existing BLM procedures and guidelines, and keep this as simple as possible. This change to the original IM is being issued to address several issues that cannot wait for final guidance. The changes and additional interim guidance relate to:
  • Form of payment—we deleted the requirement for certified checks. For the time being, the acceptable form of payment should be consistent with existing BLM procedures and guidelines;
  • Which action requires the processing fee—the submission of Form 3160-3, Application for Permit to Drill; and
  • How to handle APDs not accompanied by the fee—guidance is provided for new APDs, as well as any APDs received without the processing fee on or after December 26, 2007, and prior to the initial interim guidance (see above).
Manual /Handbook Sections Affected: At this time, the processing fee is only required for APDs filed this FY. We will change manuals and handbooks only if the fee is instituted on a permanent basis.
Coordination:  This guidance has been developed by Fluid Minerals (WO-310).
Contact: If you have questions or concerns, please contact me at 202-208-4201; or your staff may contact Tim Spisak (WO-310), at 202-452-5061 or Greg Shoop (WO-310), at 202-452-0334.

Last updated: 10-21-2009