B-123257, JUL. 1, 1955

B-123257: Jul 1, 1955

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TO THE SECRETARY OF THE INTERIOR: REFERENCE IS MADE TO LETTER DATED MARCH 9. THE FUND IS COMPRISED OF PAYMENTS MADE ON ACCOUNT OF 17 STATE LEASES PURSUANT TO NOTICES ISSUED BY YOUR DEPARTMENT IN 1950. FINAL JUDGMENT IN THE CASE WAS HANDED DOWN ON DECEMBER 11. WAS AMENDED AND SUPPLEMENTED A NUMBER OF TIMES. SINCE LEGISLATION WAS PENDING IN CONGRESS WHICH WOULD TRANSFER OWNERSHIP OF THE SUBMERGED LANDS IN QUESTION TO THE STATE. THE SUBMERGED LANDS WERE GRANTED TO THE STATES BY THE SUBMERGED LANDS ACT OF MAY 22. EXCEPT THAT PORTION OF SUCH MONEYS WHICH (1) IS REQUIRED TO BE RETURNED TO A LESSEE. OR (2) IS DEDUCTIBLE AS PROVIDED BY STIPULATION OR AGREEMENT BETWEEN THE UNITED STATES AND ANY OF THE SAID STATES.'.

B-123257, JUL. 1, 1955

TO THE SECRETARY OF THE INTERIOR:

REFERENCE IS MADE TO LETTER DATED MARCH 9, 1955, FROM THE ADMINISTRATIVE ASSISTANT SECRETARY, REQUESTING A DECISION AS TO THE AUTHORITY OF YOUR DEPARTMENT TO DISPOSE OF A FUND, AMOUNTING TO $551,232.75, CREATED BY PAYMENTS MADE TO THE UNITED STATES BETWEEN DECEMBER 11, 1950, AND MAY 22, 1953, ON ACCOUNT OF RENTALS AND ROYALTIES BY THE HOLDERS OF LEASES ISSUED BY THE STATE OF LOUISIANA FOR SUBMERGED LANDS IN THE GULF OF MEXICO. THE FUND IS COMPRISED OF PAYMENTS MADE ON ACCOUNT OF 17 STATE LEASES PURSUANT TO NOTICES ISSUED BY YOUR DEPARTMENT IN 1950, 1951 AND 1952.

THE LETTER OF THE ADMINISTRATIVE ASSISTANT SECRETARY STATES THAT,DURING SEVERAL YEARS PRIOR TO 1950, THE STATE OF LOUISIANA ISSUED MINERAL LEASES TO CERTAIN PERSONS AND FIRMS FOR SUBMERGED LANDS OF THE CONTINENTAL SHELF IN THE GULF OF MEXICO. SUBSEQUENTLY, ON JUNE 5, 1950, THE SUPREME COURT OF THE UNITED STATES, IN UNITED STATES V. LOUISIANA, 339 U.S. 699, HELD THAT THE UNITED STATES POSSESSED PARAMOUNT RIGHTS IN SUCH LANDS. FINAL JUDGMENT IN THE CASE WAS HANDED DOWN ON DECEMBER 11, 1950. ON THAT DATE THE THEN SECRETARY OF THE INTERIOR, ISSUED A NOTICE WHICH, IN SUBSTANCE, AUTHORIZED PERSONS THEN CONDUCTING OPERATIONS UNDER STATE LEASES TO CONTINUE FOR 60 DAYS AFTER THE DATE OF THE NOTICE SUBJECT TO THE PAYMENT TO THE UNITED STATES OF THE EQUIVALENT OF ANY RENTALS, ROYALTIES, AND OTHER PAYMENTS CALLED FOR BY THE LEASE. THE "NOTICE" DATED DECEMBER 11, 1950, WAS AMENDED AND SUPPLEMENTED A NUMBER OF TIMES, SO AS TO AUTHORIZE CONTINUANCE OF OPERATIONS UNDER SUCH LEASES FOR AN INDEFINITE PERIOD. PURSUANT TO SUCH NOTICES THE 17 LESSEES CONTINUED OPERATIONS AND PAID THE UNITED STATES THE EQUIVALENT OF ANY RENTALS, ROYALTIES AND OTHER PAYMENTS CALLED FOR BY THE STATE LEASES. SINCE LEGISLATION WAS PENDING IN CONGRESS WHICH WOULD TRANSFER OWNERSHIP OF THE SUBMERGED LANDS IN QUESTION TO THE STATE, THE LESSEES MADE DUPLICATE PAYMENTS TO THE STATE OF LOUISIANA. SUBSEQUENT TO THE DATES OF THE PAYMENTS TO THE UNITED STATES, THE SUBMERGED LANDS WERE GRANTED TO THE STATES BY THE SUBMERGED LANDS ACT OF MAY 22, 1953, 67 STAT. 29, 43 U.S.C., SUPP. I, 1301-1315.

SECTION 3 (B) OF TITLE II OF THE ACT, 43 U.S.C., SUPP. I, 1311 (B), PROVIDES, IN PERTINENT PART--- QUOTING FROM THE CODE--- AS FOLLOWS:

"/C) THE UNITED STATES RELEASES AND RELINQUISHES UNTO SAID STATES AND PERSONS AFORESAID, EXCEPT AS OTHERWISE RESERVED HEREIN, ALL RIGHT, TITLE, AND INTEREST OF THE UNITED STATES, IF ANY IT HAS, IN AND TO ALL SAID LANDS, IMPROVEMENTS, AND NATURAL RESOURCES * * * AND (3) THE SECRETARY OF THE INTERIOR OR THE SECRETARY OF THE NAVY OR THE TREASURER OF THE UNITED STATES SHALL PAY TO THE RESPECTIVE STATES OR THEIR GRANTEES ISSUING LEASES COVERING SUCH LANDS OR NATURAL RESOURCES ALL MONEYS PAID THEREUNDER TO THE SECRETARY OF THE INTERIOR OR TO THE SECRETARY OF THE NAVY OR TO THE TREASURER OF THE UNITED STATES AND SUBJECT TO THE CONTROL OF ANY OF THEM OR TO THE CONTROL OF THE UNITED STATES ON MAY 22, 1953, EXCEPT THAT PORTION OF SUCH MONEYS WHICH (1) IS REQUIRED TO BE RETURNED TO A LESSEE; OR (2) IS DEDUCTIBLE AS PROVIDED BY STIPULATION OR AGREEMENT BETWEEN THE UNITED STATES AND ANY OF THE SAID STATES.'

SECTION 3 (C) OF TITLE II OF THE ACT, 43 U.S.C., SUPP. I, 1311 (C), PROVIDES IN PERTINENT PART AS FOLLOWS:

"THE RIGHTS, POWERS, AND TITLES HEREBY RECOGNIZED, CONFIRMED, ESTABLISHED, AND VESTED IN AND ASSIGNED TO THE RESPECTIVE STATES AND THEIR GRANTEES ARE SUBJECT TO EACH LEASE EXECUTED BY A STATE, OR ITS GRANTEE, WHICH WAS IN FORCE AND EFFECT ON JUNE 5, 1950, IN ACCORDANCE WITH ITS TERMS AND PROVISIONS AND THE LAWS OF THE STATE ISSUING, OR WHOSE GRANTEE ISSUED, SUCH LEASE, AND SUCH RIGHTS, POWERS, AND TITLES ARE FURTHER SUBJECT TO THE RIGHTS HEREIN NOW GRANTED TO ANY PERSON HOLDING ANY SUCH LEASE TO CONTINUE TO MAINTAIN THE LEASE, AND TO CONDUCT OPERATIONS THEREUNDER, IN ACCORDANCE WITH ITS PROVISIONS, FOR THE FULL TERM THEREOF, AND ANY EXTENSIONS, RENEWALS, OR REPLACEMENTS AUTHORIZED THEREIN, OR HERETOFORE AUTHORIZED BY THE LAWS OF THE STATE ISSUING, ON WHOSE GRANTEE ISSUED SUCH LEASE * * * PROVIDED, HOWEVER, THAT WITHIN NINETY DAYS FROM MAY 22, 1953 (I) THE LESSEE SHALL PAY TO THE STATE OR ITS GRANTEE ISSUING SUCH LEASE ALL RENTS, ROYALTIES, AND OTHER SUMS PAYABLE BETWEEN JUNE 5, 1950, AND MAY 22, 1953, UNDER SUCH LEASE AND THE LAWS OF THE STATE ISSUING NOR WHOSE GRANTEE ISSUED SUCH LEASE, EXCEPT SUCH RENTS, ROYALTIES, AND OTHER SUMS AS HAVE BEEN PAID TO THE STATE, ITS GRANTEE, THE SECRETARY OF THE INTERIOR OR THE SECRETARY OF THE NAVY OR THE TREASURER OF THE UNITED STATES AND NOT REFUNDED TO THE LESSEE; AND (II) THE LESSEE SHALL FILE WITH THE SECRETARY OF THE INTERIOR OR THE SECRETARY OF THE NAVY AND WITH THE STATE ISSUING OR WHOSE GRANTEE ISSUED SUCH LEASE, INSTRUMENTS CONSENTING TO THE PAYMENT BY THE SECRETARY OF THE INTERIOR OR THE SECRETARY OF NAVY OR THE TREASURER OF THE UNITED STATES TO THE STATE OR ITS GRANTEES ISSUING THE LEASE, OF ALL RENTS, ROYALTIES, AND OTHER PAYMENTS UNDER THE CONTROL OF THE SECRETARY OF THE INTERIOR OR THE SECRETARY OF THE NAVY OR THE TREASURER OF THE UNITED STATES WHICH HAVE BEEN PAID, UNDER THE LEASE, EXCEPT SUCH RENTALS, ROYALTIES, AND OTHER PAYMENTS AS HAVE ALSO BEEN PAID BY THE LESSEE TO THE STATE OR ITS GRANTEE.'

OUR ATTENTION IS INVITED TO THE "NOTICES" ISSUED BY YOUR DEPARTMENT AND TO THE OUTER CONTINENTAL SHELF LANDS ACT OF AUGUST 7, 1953, 67 STAT. 462, 43 U.S.C. 1331-1343 AS ALSO HAVING A POSSIBLE BEARING ON THE DISPOSITION OF THE FUNDS IN QUESTION.

IT IS STATED IN THE LETTER THAT YOUR DEPARTMENT HAS NO DOUBT OF THE EXISTENCE OF AUTHORITY TO MAKE PAYMENTS TO THE STATES OF ANY AMOUNTS PAID TO THE UNITED STATES BY LESSEES WHERE THE LESSEES HAVE CONSENTED TO SUCH PAYMENTS. HOWEVER, YOUR DEPARTMENT IS UNCERTAIN AS TO WHETHER PAYMENTS MADE TO THE UNITED STATES BY THE HOLDERS OF THE 17 STATE LEASES IN QUESTION MAY BE REFUNDED TO THE LESSEES INVOLVED WHO HAVE MADE ALL PAYMENTS DUE TO THE STATE UNDER THE TERMS OF THEIR LEASE AND ALSO MADE DUPLICATE PAYMENTS TO THE UNITED STATES. SPECIFICALLY, AN ANSWER TO THE FOLLOWING QUESTIONS IS REQUESTED:

"/1) DOES THE SUBMERGED LANDS ACT AUTHORIZE REPAYMENTS IN THESE CASES?

"/2) IF YOUR ANSWER TO QUESTION (1) IS IN THE NEGATIVE DOES SECTION 10 (A) OF THE OUTER CONTINENTAL SHELF LANDS ACT AUTHORIZE SUCH REPAYMENTS?

"/3) IF REPAYMENT CANNOT BE MADE UNDER EITHER OF THE ACTS MENTIONED AND BEARING IN MIND THAT THE ATTORNEY GENERAL IN AN OPINION DATED IN 1948 (40 OP.ATTY.GEN. 540) HELD THAT THE SUBMERGED LANDS ARE NOT PUBLIC LANDS OF THE UNITED STATES, MAY REPAYMENT BE MADE UNDER AUTHORITY OF 43 U.S.C. SECS. 95 TO 98, AS EXTENDED TO MINERAL LEASES BY SECTION 98 (A/?

"/4) IF THE ANSWER TO ALL OF THE PRECEDING QUESTIONS IS IN THE NEGATIVE, MAY THE REPAYMENTS BE MADE TO THE LESSEES PURSUANT TO THE PROVISIONS OF THE NOTICES ISSUED BY THE SECRETARY OF THE INTERIOR AS "APPROVED AND CONFIRMED" WHICH ARE SPECIFICALLY LISTED ABOVE (A) AS TO ALL OF THE LEASES OR (B) ONLY AS TO THE LEASES OF THE CLASS DESCRIBED IN PART III OF THE NOTICE DATED DECEMBER 11, 1950?

ALTHOUGH SECTIONS 3 (B) OF THE SUBMERGED LANDS ACT PROVIDES FOR CERTAIN PAYMENTS TO BE MADE TO THE STATES OR THEIR GRANTEES, IT DOES NOT, IN SPECIFIC TERMS, PROVIDE FOR, OR AUTHORIZE PAYMENTS TO, THE LESSEES. HOWEVER, THE LANGUAGE THEREIN PROVIDING THAT "THE SECRETARY OF THE INTERIOR * * * SHALL PAY TO THE RESPECTIVE STATES OR THEIR GRANTEES ISSUING LEASES COVERING SUCH LANDS OR NATURAL RESOURCES ALL MONEYS PAID THEREUNDER TO THE SECRETARY OF THE INTERIOR * * * EXCEPT THAT PORTION OF SUCH MONEYS WHICH (1) IS REQUIRED TO BE RETURNED TO A LESSEE * * *," IMPLIES THAT THE CONGRESS INTENDED THAT ANY MONEYS RECEIVED BY THE UNITED STATES IN CONNECTION WITH SUCH LEASES SHOULD BE REFUNDED TO THE LESSEES OR TO THE STATES OR THEIR GRANTEES, WHICHEVER IS THE PROPER PARTY. THE LANGUAGE USED IN THE LAST PROVISO OF SECTION 3 (C) OF THE ACT REQUIRING THE LESSEE TO PAY TO THE STATE OR ITS GRANTEE ALL SUMS PAYABLE UNDER SUCH LEASE BETWEEN JUNE 5, 1950, AND MAY 22, 1953, EXCEPT THOSE SUMS PAID THE LESSOR OR THE UNITED STATES "AND NOT REFUNDED TO THE SSEE," SUPPORTS SUCH CONSTRUCTION IN THAT IT RECOGNIZES CERTAIN OF THE AMOUNTS COLLECTED BY THE UNITED STATES FROM THE LESSEES WOULD PROPERLY BE FOR REFUND TO THEM RATHER THAN TO THE STATES.

ALSO, THE LEGISLATIVE HISTORY OF THE SUBMERGED LANDS ACT SHOWS THAT THE CONGRESS WAS WELL AWARE THAT SOME LESSEES OF SUBMERGED LANDS HAD MADE PAYMENTS UNDER THEIR LEASES TO THE STATE OR ITS GRANTEE AND DUPLICATE PAYMENTS TO THE UNITED STATES. SEE PAGE 1312, HEARINGS IN EXECUTIVE SESSIONS BEFORE THE COMMITTEE ON INTERIOR AND INSULAR AFFAIRS, UNITED STATES SENATE, 83D CONGRESS ON S.J.RES. 13, A COMPANION BILL TO H.R. 4918, WHICH BECAME THE SUBMERGED LANDS ACT AFTER THE SENATE AMENDED H.R. 4918 BY SUBSTITUTING FOR THE TEXT THEREOF THE LANGUAGE OF S.J.RES. 13. THE LEGISLATIVE HISTORY FURTHER SHOWS THAT CONGRESS INTENDED THAT IN SUCH CASES REFUNDS SHOULD BE MADE TO THE LESSEES AND INCLUDED THE LANGUAGE "EXCEPT THAT PORTION OF SUCH MONEYS WHICH (1) IS REQUIRED TO BE RETURNED TO A LESSEE" IN THE ACT, TO ACCOMPLISH SUCH PURPOSE (SEE PAGE 1312 OF THE ABOVE CITED SENATE HEARINGS).

ACCORDINGLY, QUESTION 1 IS ANSWERED IN THE AFFIRMATIVE, MAKING ANSWERS TO QUESTIONS 2, 3, AND 4 UNNECESSARY.