On April 26, 2017, the states of California and New Mexico filed a lawsuit in the U.S. District Court for the Northern District of California that challenges the Bureau of Land Management’s February 22, 2017 decision to delay the effective date of the “Consolidated Federal Oil & Gas and Federal & Indian Coal Valuation Reform Rule.” BLM’s decision to postpone the effective date of the final rulemaking was made in light of a lawsuit filed by several trade associations challenging the rule in the U.S. District Court for the District of Wyoming. BLM has since published a proposal to repeal the rule in its entirety.
BLM previously stated that the Valuation Rule would increase royalty collections on federal lands between $71.9 million and $84.9 million annually. According to California and New Mexico, because the final rule became effective January 1, 2017, it was improper for BLM to postpone the effective date on February 22, 2017 – after the final rule was already effective. The states argue that Section 705 of the Administrative Procedure Act does not permit the federal government to delay a rule that is already effective.