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provisions making the continuations or extensions subject to rules and regulations in force at the expiration of the primary term of the lease.

Shell, however, would not make the distinction to which Richfield accedes between the 5-year extensions under section 17 and the partial assignment extention under section 30(a). It contends that the section 17 reference to rules and regulations has been interpreted as relating only to routine, procedural matters as distinguished from substantive matters, and that the July 3, 1958, act cannot be retrospectively applied to leases issued prior to its enactment "under the guise of considering it as constituting a rule or regulation.”

Both appellants refer to a provision in the leases that they are: subject to the terms and provisions of the Act of February 25, 1920 (41 Stat. 437, 30 U.S.C. 181, et seq.), as amended, * * * and to all reasonable regulations of the Secretary of the Interior now or hereafter in force when not inconsistent with any express and specific provisions herein, which are made a part hereof. Richfield argues that this provision means that the express rental provision as contained in the leases cannot be changed except in accordance with the Mineral Leasing Act as it existed on the effective date of each of the leases or at the time when each of the leases was granted a 5-year extension, or by virtue of any regulation in force on the above-mentioned dates when not inconsistent with the express rental provisions. It contends that the Bureau ignored the fact that the regulations in effect when the extensions were granted provided for only a 25 cents per acre rental for leases in Alaska in their sixth year and thereafter. It states that 43 CFR 192.80 (a) (1), as amended and in effect from April 21, 1961, to October 16, 1962, provided :

The lease rentals for the primary and extended terms of all oil and gas leases which issued prior to September 2, 1960, shall be payable at the rates in effect at that time and prescribed in the lease. It contends that this applies to the leases for lands in Alaska as well as leases for lands elsewhere in the United States and makes it clear that the increase in rentals on Alaska leases should only affect those leases which are issued after the date of the 1958 amendment to the Alaska Oil Proviso. It notes that the regulation has now been changed so that it reads as follows:

For the sixth and each succeeding year of a lease which issued prior to September 2, 1960, and in the State of Alaska of any lease whose initial term expired on or after July 3, 1958, rental shall be payable at the rate of 50 cents per acre or fraction thereof. 43 CFR, 1964 Supp., 3125.1 (a) (1), formerly 43 CFR, 1964 rev., 192.80 (a) (1). Richfield contends that this regulation is applicable only to the 5-year extensions and is not applicable to other types of extensions or continuations, even though it may have been in effect when the partial assignments of these leases were filed.

July 30, 1964

Shell, however, in referring to the lease provision quoted above, states that any change in a rule or regulation must be consistent with the terms of the lease when it issued, and, therefore, if the act of July 3, 1958, can be considered as constituting a rule it is inconsistent with the lease terms provided for rentals and thus cannot be validly applied to the leases here in question.

Thus, although both appellants are concerned only with the rentals for the 11th and 12th years of the leases, they suggest two different views in applying the act of July 3, 1958, as to what and when leases may be affected by it.

In Colorado Oil and Gas Corporation, 71 I.D. 284 (A-30003, July 27, 1964), the Department held that the increased rental rate required by the act of July 3, 1958, applies to the extended 5-year term of leases which were issued prior to that date and extended after that date. To that extent, then, Shell's position has been rejected and Richfield's accepted.

This, however, does not decide the issue involved in the present appeals. In considering that issue, it is apparent that there are substantial differences between the statutory provisions authorizing the 5-year extensions, to which the increased rentals apply, and those providing for the 2-year extension resulting from a partial assignment. Section 17 specifically provides that a lease extended for five years shall be subject to the rules and regulations in force at the expiration of the initial 5-year term of the lease. Section 30(a) has no such provision as to leases extended for two years. Although a lessee has to file a partial assignment of a lease which has to be approved by this Department in order to bring into operation the 2year extension under section 30(a), the statutory and lease terms make this extension automatic without any limiting language. Under section 30(a) Congress has provided that the Secretary of the Interior shall disapprove an assignment only for lack of qualification of the assignee or sublessee or for lack of sufficient bond. Therefore, there is a statutory duty upon the Secretary to approve such an assignment if the lease is in good standing and all requirements have been satisfied. There are no statutory or regulatory provisions which would authorize this Department to condition the approval of a partial assignment upon an agreement to a higher rental. The only provision which might be deemed to require such a change is the 1958 act. However, without some prior reservation of such authority in the statutory and lease terms, as is true in the case of the 5-year extension, there is lacking authority to impose a higher rental rate.

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Five-year extensions under section 17 are "granted” by the Department. Two-year extensions under section 30(a) are considered to be granted by the statute without the necessity for administrative action. It seems reasonable then to read the language previously quoted from the Senate committee report, that “any extended term hereafter granted on such existing leases” (italics added) will be subject to increased rental rates, as indicating that the increased rental provision was intended to apply to 5-year extensions and not to section 30(a) extensions.

Therefore, we hold that if the 5-year extension of a lease were granted prior to July 3, 1958, the rental rates in the lease remained unchanged for the succeeding years after the act, including the extended term provided for by section 30(a) where a partial assignment segregates the lease. It follows that payments of lease rentals for the 11th and 12th years of the leases under consideration in amounts greater than 25 cents per acre were in excess of that required under the applicable law and regulations.

It appears then that the appellants are entitled to refunds under section 204 of the Public Land Administration Act of July 14, 1960, 74 Stat. 507, 43 U.S.C. $ 1374 (Supp. V, 1964), which repealed previous acts authorizing repayments and consolidated the authority under one provision. The act provides:

In any case where it shall appear to the satisfaction of the Secretary of the Interior that any person has made a payment under any statute relating to the sale, entry, lease, use, or other disposition of the public lands which is not required, or is in excess of the amount required, by applicable law and the regulations issued by the Secretary, the Secretary, upon application or otherwise, may cause a refund to be made from applicable funds. When these cases are returned to the Bureau of Land Management, the facts constituting the basis for repayment as set forth in this decision, especially with respect to those leases involved in Richfield's appeal, should be verified. If they are, a refund should be made from available applicable funds.

Accordingly, pursuant to the authority delegated to the Solicitor by the Secretary of the Interior (210 DM 2.2A (1) (a); 24 F.R. 1348), the decisions appealed from are reversed and the cases are remanded to the Bureau of Land Management for appropriate action consistent with this decision.

ERNEST F. HOM,

Assistant Solicitor.

W. S. GOVERNMENT PRINTING OFFICE: 1964

APPEAL OF VITRO CORPORATION OF AMERICA

IBCA-376

Decided August 6, 1964

Contracts: Appeals—Public Records
Final determinations concerning the disclosure to contractors of records that

the custodian of the records is unwilling to produce are, as a matter of general practice, made by the Solicitor where the disclosure sought is not connected with any pending contract appeal, and by the Board of Contract Appeals where the records are sought in connection with a pending contract

appeal. Public Records The phrase "prejudicial to the interests of the Government,” as used in the

statutes and regulations pertaining to disclosure of records of the Department of the Interior, ordinarily comprehends those documents as to which the Government possesses a privilege against disclosure under the law of

evidence. Contracts: Appeals—Rules of Practice: Evidence—Public Records The question of whether particular documents, sought by a contractor for use

in connection with a contract appeal, are within or without the scope of the Government's privilege against disclosure is a question that calls for the evaluation of such factors as: (1) the relevancy of the documents to the subject matter involved in the appeal; (2) the necessity of the documents for the proving of the appellant's case; (3) the seriousness of the danger to the public interests which disclosure of the documents would involve; (4) the presence in the documents of factual data, on the one hand, or of policy opinions, on the other; (5) the existence of confidential relationships which disclosure of the documents might unduly impair; and (6) the normal desirability of full disclosure of all facts in the possession of either party to the appeal.

BOARD OF CONTRACT APPEALS

The instant decision is necessitated by disagreement between the parties concerning the extent to which appellant is entitled to inspect Government records that involve the contract under which the appeal arises. The contract was for construction of the Southside Canal of the Collbran Project in Colorado, and the documents in dispute are contained in the files of the offices of the Bureau of Reclamation at Denver and Grand Junction, Colorado.

On February 24, 1964, a motion for the production of documents was filed with the Board by appellant. This motion was discussed at a conference held before the Chairman of the Board, pursuant to 43 CFR 4.9, on February 26, 1964. The Chairman stated, in substance, that it was the policy of the Department to make available to contractors, without technicality, all documents material to appeals taken by them that "can be made available."i He also indicated that the Board would not be in a position to determine the issues presented by the then pending motion until those issues had been narrowed through such means as the submission of contested documents for examination by the Board. Counsel for appellant thereupon withdrew the motion to produce.

71 I.D., Nos. 8 & 9

746-471-64---1

In a letter dated March 26, 1964, counsel for appellant asked the Department Counsel to make available for inspection all documents in sixteen broadly described categories. Virtually every document that had any connection at all with the construction of the Southside Canal of the Collbran Project could be said to come within the scope of this request.

Department Counsel responded by a letter dated April 23, 1964, in which he expressed a willingness to make available all documents pertaining to the Southside Canal, with certain exceptions. He stated the following exceptions:

(1) Inter-office or intra-office communications.

(2) Opinions, deductions or conclusions made by engineers, designers or geologists in the design of the Southside Canal.

(3) Personal notes or diaries of individual members of the Bureau of Reclamation staff.

(4) Supporting calculations to feasibility of pre-bid engineer's estimates.

Counsel for appellant opposed recognition of these exceptions in a letter to the Department Counsel dated May 1, 1964, and in a letter to the Board dated May 6, 1964.

Department Counsel, in a letter to counsel for appellant dated May 12, 1964, cited and quoted various authorities relating to the scope of the privilege of the Government to withhold information possessed by it from disclosure. He concluded as follows:

It is submitted that the rules of law set out in these cases support the position expressed in my letter of April 23, 1964 to you. We are willing to produce all geologic logs, soil tests, quantity computations, and all factual data of any nature which may have been made during the investigation of the Southisde Canal. We are willing in this case to produce the inspector's reports. We are willing to show you any basic engineering data which was produced during or before construction. All project photographs will be made available. In brief, all factual information will be made available to you.

The foreging represent my views as to items which the Government should be required to make available. However, if the Board should disagree with the above views, and should consider that additional material should be made available, I will strongly recommend to the custodians of the sundry records in question that they produce any material that the Board believes should be subject

1 Tr. pp. 43-45.

Ibid. & Ibid.

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