Establishment of New Policy and Procedures to Determine Whether Mining Claims Held Under a “Small Miner” Maintenance Fee Waiver Require Current Year Maintenance Fees After a Transfer of Interest or New Mining Claim Location Notice Is Filed

UNITED STATES DEPARTMENT OF THE INTERIOR

BUREAU OF LAND MANAGEMENT

Washington, D.C.  20240

April 7, 2011

In Reply Refer To:

3833/3860 (320) P

EMS TRANSMISSION 04/18/2011

Instruction Memorandum No. 2011-100

Expires:  09/30/2012

To:                   All State Directors

From:               Assistant Director, Minerals and Realty Management

Subject:           Establishment of New Policy and Procedures to Determine Whether Mining Claims Held Under a “Small Miner” Maintenance Fee Waiver Require Current Year Maintenance Fees After a Transfer of Interest or New Mining Claim Location Notice Is Filed

Program Area:  Mining Law Adjudication.

Purpose:  This Instruction Memorandum (IM) establishes new policy and outlines the proper procedures for processing transfers of interest and new notices of location and, after processing, making a determination regarding whether a mining claimant owes current-year maintenance fees for any claim(s) or site(s)[1] held under a “small miner” maintenance fee waiver (waiver) that was submitted prior to the transfer or new location.

Policy/Action:  At the present time, when a transfer of interest is received, the Bureau of Land Management (BLM) mining law adjudicator only checks the status of the transferred claims to determine if current-year maintenance fees may be due.  Under the current procedures, transfers of interest[2], as they relate to maintenance fee requirements, are processed as follows:

1. The adjudicator makes the initial determination if the transferred/newly acquired mining claims are being held under a waiver.

2. If the transferred claims are held under a waiver, the adjudicator must then determine if the transferee owns or co-owns more than 10 claims, including the claims being acquired.

3. If the transferee already holds more than 10 claims or if the transferee is holding claims under a waiver and would go over the 10-claim limit after acquiring the transferred claims, then the maintenance fees for the transferred claims cannot be waived (43 CFR 3835.20).  In such cases, the adjudicator writes a decision requiring payment of current-year maintenance fees on or before the upcoming September 1[3] for the transferred claims only.  If the transferee is not over the 10-claim limit or will not go over the 10-claim limit after acquiring the transferred claims, the transfer is processed and no maintenance fees are required to be collected.

In addition to performing the procedures described above for transfers of interest, the following new procedures must also now be followed.  Additionally, the new procedures, beginning with step 3 below, will also be applied when recording new notices of location.  The new procedures are: 

1. If it is determined during step 1 above, that the claims being transferred are under a waiver and the transferee was holding additional claims under a waiver prior to the transfer and the newly acquired claims puts the transferee over the 10-claim limit, both waivers no longer apply.  The adjudicator must issue a decision requesting payment for the current-year maintenance fees on or before the upcoming September 1 for all the claims now held by the transferee, not just for the newly transferred claims.

2. If it is determined during step 1 above, that the claims being transferred are not under a waiver, i.e., maintenance fees were paid, the adjudicator must still determine whether the transferee was holding claims under a waiver prior to the transfer and whether the newly acquired and the previously held claims together put the transferee over the 10-claim limit.

If the claimant now owns more than 10 claims, the waiver that held the claims before the transfer no longer applies. The adjudicator must issue a decision requesting payment for the current-year maintenance fees on or before the upcoming September 1 for all claims held under a waiver prior to the transfer.

3. When a notice of location is received for recording, in addition to following the normal procedures for recording the notice of location, the adjudicator must also determine whether the owner of the new claim has other claims and if those claims are being held under a waiver.

If the recording of the new claims puts the claimant over the 10-claim limit, the adjudicator must issue a decision to the claimant requesting payment for current-year maintenance fees for any claims held under a waiver for the current year, prior to locating the new claims.

The above procedure regarding new claims does not apply if the new claims are “bridge claims,” e.g., located in 1 assessment year and recorded with the BLM in the next assessment year. In this instance, if the bridge claims puts the claimant over the 10-claim limit, the claimant did not actually qualify to file a waiver because they owned more than 10 claims on September 1.The claimant has the full 90-day period after the date of location of the new claims to pay the current year maintenance fees for the new claims; however, the claims previously waived for the current year will be declared forfeited since the claimant was not qualified on September 1 to request a waiver.

4. If the adjudicator determines that current-year maintenance fees are due under the guidance in this IM for mining claims owned prior to a transfer or new location, the adjudicator must also examine the applicable waiver certifications to determine whether any of the claims, which no longer qualify for the waiver, are co-owned by another claimant.  If they are, the adjudicator must also apply these procedures to the co-claimant and determine whether the co-claimant owns other mining claims separate from those owned by the claimant that are also being held under a waiver.  If so, those claims can also no longer be held under waiver and the adjudicator must write a decision to the co-claimant requesting current-year maintenance fees on or before the upcoming September 1 for those claims.

In most of the scenarios outlined above, maintenance fee payments for 2 assessment years will be due on the same date.  In these instances, if insufficient fees are submitted, the adjudicator must apply the following procedures:

1. If the shortage is discovered before the deadline (September 1), the adjudicator will contact the claimant by telephone or if there is sufficient time before the deadline, by Notice using certified mail, to remind the claimant the remaining fees are due on or before September 1. 

2. If the shortage is discovered after the deadline, the full amount due per claim will be applied in numerical order until the funds run out.  The adjudicator will issue a forfeiture decision for those claims where there is insufficient or no funds available.  Partial payments cannot be applied.

Attached are examples of scenarios for the above-described procedures as to when maintenance fee payments are required.

Timeframe:  This policy is effective immediately.

Budget Impact:  This policy is expected to increase the time that adjudicators spend in processing transfers of interest and notices of location.  Where the transferee or locator holds mining claims or sites under a waiver prior to a transfer or new location, this increase in adjudicator workload may be particularly significant.  This policy is also expected to cause an increase in voidance decisions and may require additional adjudication resources to defend the resulting appeals.

Background:  In May 2009, the Interior Board of Land Appeals (IBLA) issued a decision indicating that mining claimants holding mining claims under a small miner waiver are required to pay current year maintenance fees for those claims if at any time after September 1 they acquire mining claims through a transfer of interest such that their total holdings exceed the 10-claim limit and they no longer qualify for a small miner waiver (Randi Rovetto, 177 IBLA 257 (2009)).  Since the IBLA’s decision seemed to take a position not explicitly covered by the BLM’s regulations, the BLM petitioned the IBLA for reconsideration.  The IBLA denied the BLM’s petition for reconsideration in an Order, which made it clear that, even if “on the date the fees were due” the claimant held 10 or fewer claims or sites and validly filed for a waiver, the claimant was no longer entitled to a waiver for those claims if at any time during the assessment year the claimant was a transferee of mining claims such that the claimant’s holdings exceeded the 10-claim limit.  In addition, even though the above-referenced IBLA decision addresses transfers of interest only, the policy reflected in this IM, as it applies to new locations, is a logical extension of the IBLA’s interpretation of when the claimant is no longer entitled to a waiver and when additional fees are due.

Manual/Handbook Sections Affected:  The policy contained in this IM will be incorporated into H-3830-1, Administration of Mining Claims.

Coordination:  This IM was coordinated through the Solicitor’s Office and the Division of Solid Minerals (WO-320).

Contact:  If you have any questions concerning this IM, please contact me at 202-208-4201, or your staff may contact Mitchell Leverette, Chief, Division of Solid Minerals, at 202-912-7113, email address Mitchell_Leverette@blm.gov, or Sonia Santillan at 202-912-7123, email address Sonia_Santillan@blm.gov.

Signed by:                                                                   Authenticated by:

Michael Nedd                                                             Robert M. Williams

Assistant Director                                                       Division of IRM Governance,WO-560

Minerals and Realty Management

1 Attachment

            1 – Transfer of Interest and New Mining Claim Scenarios (2 pp)