Rejection of Coal Bids that are Less Than Presale Estimate of Fair Market Value and the Mandatory Inclusion of a Washington Office Representative on All Future Coal Lease Sale Panels

UNITED STATES DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT
WASHINGTON, D.C. 20240
http://www.blm.gov

September 26, 2014

In Reply Refer To:
3422 (320) P

EMS TRANSMISSION 12/19/2014
Instruction Memorandum No. 2014-154

Expires:  09/30/2015

To:                   All Washington Office and Field Office Officials

From:               Assistant Director, Energy, Minerals, and Realty Management

Subject:           Rejection of Coal Bids that are Less Than Presale Estimate of Fair Market Value and the Mandatory Inclusion of a Washington Office Representative on All Future Coal Lease Sale Panels

Program Area:  Coal Management.

Purpose:  This Instruction Memorandum (IM) reiterates the statutory and regulatory requirement to reject coal lease sale bids which are less than the presale estimate of  fair market value (FMV), and a new requirement that a Washington Office (WO) representative be included on all future coal lease post sale panels.  

Policy/Action:  Consistent with the Mineral Leasing Act, 30 U.S.C. § 201(a)(1), and the BLM’s regulations at 43 CFR 3422.1(c)(1), the authorized officer will not accept any bid that is less than the FMV, as determined  by the Department.  Also effective immediately, this policy requires the inclusion of a WO representative as a voting member on all future coal lease post sale panels.  The states will contact the WO Solid Minerals Division Chief prior to the competitive lease sale to arrange for a WO representative for the panel.  This action will provide additional oversight to the valuation process. 

Timeframe:  Effective immediately.

Budget Impact:  None. 

Background:  The Office of the Inspector General (OIG) published the Coal Management Program report (Report) on June 11, 2013, that contained 13 recommendations.  This IM addresses OIG recommendation 4, to reject coal lease sale bids that are less than the established FMV, in compliance with the Mineral Leasing Act.   On several occasions the BLM accepted bids less than the presale FMV without thoroughly documenting the reasons for doing so.  The BLM concurred with the recommendation, stating that it will issue supplemental guidance reiterating existing requirements, and will integrate additional WO review by including a minerals specialist as a member of the post-sale panel.

Manual/Handbook Sections Affected:  This policy will be incorporated into the H-3070-1 Economic Evaluation of Coal Properties Handbook when next updated.

Coordination:  State, district, and field offices and the WO Solid Minerals Division coal specialists evaluated the OIG’s recommendation 4 and coordinated the development of this policy.

Contact:  If you have any questions concerning the content of this IM, 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 mleveret@blm.gov; or John A. Lewis, 202-912-7117, or j35lewis@blm.gov.

Signed by:                                                                   Authenticated by:

Michael Nedd                                                             Robert M. Williams
Assistant Director                                                       Division of IRM Governance,WO-860
Energy, Minerals and Realty Management