---
kind: "section"
citation: "30 U.S.C. § 1735"
title: "30"
title_heading: "Mineral Lands and Mining"
number: "1735"
heading: "Delegation of royalty collections and related activities"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/30/1735"
units:
  - "Chapter 29 — Oil and Gas Royalty Management"
  - "Subchapter II — States and Indian Tribes"
---

# §1735. Delegation of royalty collections and related activities

- (a) **Authorization of Secretary—** Upon written request of any [State](/usc/30/1702.md?p=16), the [Secretary](/usc/30/1702.md?p=15) is authorized to delegate, in accordance with the provisions of this section, all or part of the authorities and responsibilities of the [Secretary](/usc/30/1702.md?p=15) under this chapter to:
  - (1) conduct inspections, audits, and investigations;
  - (2) receive and process [production](/usc/30/1702.md?p=13) and financial reports;
  - (3) correct erroneous report data;
  - (4) perform automated verification; and
  - (5) issue [demands](/usc/30/1702.md?p=23), subpoenas, and orders to perform restructured accounting, for [royalty](/usc/30/1702.md?p=14) management enforcement purposes,

  to any [State](/usc/30/1702.md?p=16) with respect to all [Federal land](/usc/30/1702.md?p=1) within the [State](/usc/30/1702.md?p=16).

- (b) **Prerequisites—** After notice and opportunity for a hearing, the [Secretary](/usc/30/1702.md?p=15) is authorized to delegate such authorities and responsibilities granted under this section as the [State](/usc/30/1702.md?p=16) has requested, if the [Secretary](/usc/30/1702.md?p=15) finds that—
  - (1) it is likely that the [State](/usc/30/1702.md?p=16) will provide adequate resources to achieve the purposes of this chapter;
  - (2) the [State](/usc/30/1702.md?p=16) has demonstrated that it will effectively and faithfully administer the rules and regulations of the [Secretary](/usc/30/1702.md?p=15) under this chapter in accordance with the requirements of subsections [(c)](#c) and [(d)](#d) of this section;
  - (3) such delegation will not create an unreasonable burden on any [lessee](/usc/30/1702.md?p=7);
  - (4) the [State](/usc/30/1702.md?p=16) agrees to adopt standardized reporting procedures prescribed by the [Secretary](/usc/30/1702.md?p=15) for [royalty](/usc/30/1702.md?p=14) and [production](/usc/30/1702.md?p=13) accounting purposes, unless the [State](/usc/30/1702.md?p=16) and all affected parties (including the [Secretary](/usc/30/1702.md?p=15)) otherwise agree;
  - (5) the [State](/usc/30/1702.md?p=16) agrees to follow and adhere to regulations and guidelines issued by the [Secretary](/usc/30/1702.md?p=15) pursuant to the [mineral leasing laws](/usc/30/1702.md?p=8) regarding valuation of [production](/usc/30/1702.md?p=13); and
  - (6) where necessary for a [State](/usc/30/1702.md?p=16) to have authority to carry out and enforce a delegated activity, the [State](/usc/30/1702.md?p=16) agrees to enact such laws and promulgate such regulations as are consistent with relevant Federal laws and regulations

  with respect to the [Federal lands](/usc/30/1702.md?p=1) within the [State](/usc/30/1702.md?p=16).

- (c) **Ruling as to consistency of State’s proposal—** After notice and opportunity for hearing, the [Secretary](/usc/30/1702.md?p=15) shall issue a ruling as to the consistency of a [State](/usc/30/1702.md?p=16)’s proposal with the provisions of this section and regulations under [subsection (d)](#d) within 90 days after submission of such proposal. In any unfavorable ruling, the [Secretary](/usc/30/1702.md?p=15) shall set forth the reasons therefor and [state](/usc/30/1702.md?p=16) whether the [Secretary](/usc/30/1702.md?p=15) will agree to delegate to the [State](/usc/30/1702.md?p=16) if the [State](/usc/30/1702.md?p=16) meets the conditions set forth in such ruling.
- (d) **Promulgation of standards and regulations with respect to delegation—** After consultation with [State](/usc/30/1702.md?p=16) authorities, the [Secretary](/usc/30/1702.md?p=15) shall by rule promulgate, within 12 months after August 13, 1996, standards and regulations pertaining to the authorities and responsibilities to be delegated under [subsection (a)](#a), including standards and regulations pertaining to—
  - (1) audits to be performed;
  - (2) records and accounts to be maintained;
  - (3) reporting procedures to be required by [States](/usc/30/1702.md?p=16) under this section;
  - (4) receipt and processing of [production](/usc/30/1702.md?p=13) and financial reports;
  - (5) correction of erroneous report data;
  - (6) performance of automated verification;
  - (7) issuance of standards and guidelines in order to avoid duplication of effort;
  - (8) transmission of report data to the [Secretary](/usc/30/1702.md?p=15); and
  - (9) issuance of [demands](/usc/30/1702.md?p=23), subpoenas, and orders to perform restructured accounting, for [royalty](/usc/30/1702.md?p=14) management enforcement purposes.

  Such standards and regulations shall be designed to provide reasonable assurance that a uniform and effective [royalty](/usc/30/1702.md?p=14) management system will prevail among the [States](/usc/30/1702.md?p=16). The records and accounts under [paragraph (2)](#d-2) shall be sufficient to allow the [Secretary](/usc/30/1702.md?p=15) to monitor the performance of any [State](/usc/30/1702.md?p=16) under this section.

- (e) **Revocation; issuance of demand or order by Secretary—** If, after notice and opportunity for a hearing, the [Secretary](/usc/30/1702.md?p=15) finds that any [State](/usc/30/1702.md?p=16) to which any authority or responsibility of the [Secretary](/usc/30/1702.md?p=15) has been delegated under this section is in violation of any requirement of this section or any rule thereunder, or that an affirmative finding by the [Secretary](/usc/30/1702.md?p=15) under [subsection (b)](#b) can no longer be made, the [Secretary](/usc/30/1702.md?p=15) may revoke such delegation. If, after providing written notice to a [delegated State](/usc/30/1702.md?p=22) and a reasonable opportunity to take corrective action requested by the [Secretary](/usc/30/1702.md?p=15), the [Secretary](/usc/30/1702.md?p=15) determines that the [State](/usc/30/1702.md?p=16) has failed to issue a [demand](/usc/30/1702.md?p=23) or order to a Federal [lessee](/usc/30/1702.md?p=7) within the [State](/usc/30/1702.md?p=16), that such failure may result in an [underpayment](/usc/30/1702.md?p=32) of an [obligation](/usc/30/1702.md?p=25) due the [United States](/usc/30/1702.md?p=33) by such [lessee](/usc/30/1702.md?p=7), and that such [underpayment](/usc/30/1702.md?p=32) may be uncollected without Secretarial intervention, the [Secretary](/usc/30/1702.md?p=15) may issue such [demand](/usc/30/1702.md?p=23) or order in accordance with the provisions of this chapter prior to or absent the withdrawal of delegated authority.
- (f) **Compensation to State for costs of delegation; allocation of costs—** Subject to appropriations, the [Secretary](/usc/30/1702.md?p=15) shall compensate any [State](/usc/30/1702.md?p=16) for those costs which may be necessary to carry out the delegated activities under this Section.[^1] [Payment](/usc/30/1702.md?p=28) shall be made no less than every quarter during the fiscal year. Compensation to a [State](/usc/30/1702.md?p=16) may not exceed the [Secretary](/usc/30/1702.md?p=15)’s reasonably anticipated expenditure for performance of such delegated activities by the [Secretary](/usc/30/1702.md?p=15). Such costs shall be allocable for the purposes of [section 191(b) of this title](/usc/30/191.md?p=b) to the administration and enforcement of laws providing for the leasing of any onshore lands or interests in land owned by the [United States](/usc/30/1702.md?p=33). Any further allocation of costs under [section 191(b) of this title](/usc/30/191.md?p=b) made by the [Secretary](/usc/30/1702.md?p=15) for oil and gas activities, other than those costs to compensate [States](/usc/30/1702.md?p=16) for delegated activities under this chapter, shall be only those costs associated with onshore oil and gas activities and may not include any duplication of costs allocated pursuant to the previous sentence. Nothing in this section affects the [Secretary](/usc/30/1702.md?p=15)’s authority to make allocations under [section 191(b) of this title](/usc/30/191.md?p=b) for non-oil and gas mineral activities. All moneys received from sales, bonuses, rentals, [royalties](/usc/30/1702.md?p=14), [assessments](/usc/30/1702.md?p=19) and interest, including money claimed to be due and owing pursuant to a delegation under this section, shall be payable and paid to the Treasury of the [United States](/usc/30/1702.md?p=33).
- (g) **Judicial review—** Any action of the [Secretary](/usc/30/1702.md?p=15) to approve or disapprove a proposal submitted by a [State](/usc/30/1702.md?p=16) under this section shall be subject to judicial review in the [United States](/usc/30/1702.md?p=33) district court which includes the capital of the [State](/usc/30/1702.md?p=16) submitting the proposal.
- (h) **Existing delegation—** Any [State](/usc/30/1702.md?p=16) operating pursuant to a delegation existing on August 13, 1996, may continue to operate under the terms and conditions of the delegation, except to the extent that a revision of the existing agreement is adopted pursuant to this section.

## Footnotes

[^1]: So in original. Probably should not be capitalized.

## Source credit

(Pub. L. 97–451, title II, § 205, Jan. 12, 1983, 96 Stat. 2459; Pub. L. 104–185, § 3(a), Aug. 13, 1996, 110 Stat. 1702.)

## Notes

### Editorial Notes

### Codification

August 13, 1996, referred to in subsec. (d), was in the original “the date of enactment of this section”, which was translated as meaning the date of enactment of Pub. L. 104–185, which amended this section generally, to reflect the probable intent of Congress.

August 13, 1996, referred to in subsec. (h), was in the original “the date of enactment of this Act”, which was translated as meaning the date of enactment of Pub. L. 104–185, which amended this section generally, to reflect the probable intent of Congress.

### Amendments

1996—Pub. L. 104–185 amended section generally, substituting present provisions for provisions which stated in subsec. (a), authorization of Secretary to delegate to States except permission of Indian tribe required with respect to Indian lands; subsec. (b), prerequisites; subsec. (c), promulgation of regulations defining joint functions; subsec. (d), promulgation of standards and regulations with respect to delegation; subsec. (e), revocation; and subsec. (f), compensation to State for costs of delegation.

### Statutory Notes and Related Subsidiaries

### Effective Date of 1996 Amendment

Amendment by Pub. L. 104–185 applicable with respect to production of oil and gas after the first day of the month following Aug. 13, 1996, see section 11 of Pub. L. 104–185, set out as a note under section 1701 of this title.

### Applicability of 1996 Amendment

Amendment by Pub. L. 104–185 not applicable to any privately owned minerals or with respect to Indian lands, see sections 9 and 10 of Pub. L. 104–185, set out as a note under section 1701 of this title.