49582 Federal Register / Vol. 62, No. 183 / Monday, September 22, 1997 / Rules and Regulations

DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Part 3190

[WO–300–07–1310–00]

RIN 1004–AD09

Delegation of Authority, Cooperative

Agreements and Contracts for Oil and

Gas Inspections; Cooperative

Agreements

AGENCY: Bureau of Land Management,

Interior.

ACTION: Final rule.

SUMMARY: The Bureau of Land

Management (BLM) is adopting these

regulations to streamline and amend its

cooperative agreement regulations. The

rule will implement section 8(a) of the

Federal Oil and Gas Royalty

Simplification and Fairness Act that

eliminates cooperative agreements on

Federal lands and will implement a

policy change for funding of cooperative

inspection agreements on Indian lands.

DATES: Effective September 22, 1997.

ADDRESSES: Inquiries or suggestions

should be sent to the attention of the

Fluid Minerals Group at: Director (310),

Bureau of Land Management, Rm. 501,

LS, 1849 C Street, NW., Washington, DC

20240.

FOR FURTHER INFORMATION CONTACT: Ian

Senio, Regulatory Analyst, at BLM’s

Regulatory Affairs Group at (202) 452–

5049 or Sue Stephens, Program Analyst,

at BLM’s Native American Office at

(505) 438–7553.

SUPPLEMENTARY INFORMATION:

Background

In 1987 and 1991, BLM promulgated

regulations, found at 43 CFR Part 3190

(52 FR 27182) and 3192 (56 FR 2998),

respectively, implementing section 202

of the Federal Oil and Gas Royalty

Management Act of 1982, (30 U.S.C.

1732) (FOGRMA). Section 202 of

FOGRMA provided for cooperative

agreements with States and Tribes to

share oil or gas royalty management

information, and to carry out inspection,

auditing, investigation or enforcement

activities on Federal and Indian oil and

gas leases. The Federal Oil and Gas

Royalty Simplification and Fairness Act

of 1996 (Pub. L. 104–185) (FOGRSFA),

which in effect amended FOGRMA,

eliminated cooperative agreements on

Federal lands.

BLM has cooperative agreements with

several Tribes for oil and gas inspection

and enforcement activities on Tribal

lands. Up to now, these agreements

were funded at 50 percent of allowable

costs. The Minerals Management

Service (MMS) also entered into

cooperative agreements with several

Tribes for royalty accounting activities.

Initially these MMS agreements were

funded at 50 percent, but in 1991, MMS

increased its funding for cooperative

agreements to 100 percent.

This rule amends part 3190 by

removing references to cooperative

agreements on Federal lands and by

increasing funding for cooperative

agreements on Indian lands to up to 100

percent. This eliminates discrepancies

in funding these types of agreements

between bureaus within the Department

of the Interior.

On April 9, 1997 (62 FR 17138) BLM

published a proposed rule to streamline

and amend its cooperative inspection

agreement regulations found at 43 CFR

part 3192. The purpose of the

amendment was to implement Section

8(a) of FOGRSFA which eliminates

cooperative agreements on Federal

lands and to implement a policy change

for funding of cooperative agreements

on Indian lands. The 30-day comment

period expired on May 9, 1997. The

BLM received 4 comments on the

proposed rule. Of the 4 comments, 2

were from Tribes and 2 were from

government agencies. All of the

comments were carefully considered in

developing this final rule.

General Comments

The main purpose of the proposed

regulations is to implement Section 8(a)

of FOGRSFA and to increase funding for

the BLM’s cooperative inspection

agreement program. Most commenters

favored the increase in funding.

One commenter stated that the

following sentence in the preamble of

the proposed rule was confusing:

‘‘States may still enter into a cooperative

agreement on Tribal lands with the

permission of the Tribe or affected

allottee.’’ The commenter’s concern was

that an allottee cannot give permission

to the State regarding a cooperative

agreement solely impacting Tribal

lands. We agree. The sentence should

have made reference to Indian lands,

which includes allotted lands.

One commenter disagreed with the

statement in the preamble that the

increase in funding for cooperative

agreements with Tribes is purely

financial in nature because the Federal

government has a fiduciary trust

responsibility to protect Indian mineral

resources. The statement that the

regulatory change was purely financial

in nature was intended to indicate that,

for the purposes of the National

Environmental Policy Act (NEPA), the

implementation of this regulation would

not have an effect on the environment

and was not meant as a statement on

BLM’s trust responsibilities.

One commenter did not agree that

under the Regulatory Flexibility Act the

regulatory changes proposed would

‘‘not unnecessarily or

disproportionately burden small

entities’’ since Tribal governments may

be considered small entities. This

commenter also thought it was unclear

whether significant impacts affecting

the ‘‘public at large’’ pertain to entire

state(s) or reservations. The Regulatory

Flexibility Act requires an analysis if a

rule has significant economic impact on

a substantial number of small entities.

In this case, the total anticipated effect

of the regulations is $250,000 annually.

This is not considered to be a significant

effect on a substantial number of small

entities since the number of Tribes

currently participating in the

cooperative agreement program is small

(5), and individual increases only range

from $8,000 to $55,000. This funding

will have an insignificant impact on the

overall budgets of these Tribes with

producing oil and gas leases.

One commenter stated that the

protection of Indian mineral resources is

a fiduciary responsibility of the Federal

government and that the requirement for

Tribes to pay 50% of the costs is a

breach of fiduciary responsibility. The

commenter requested retroactive

application of the proposed increase to

100% funding, and reimbursement of

the 50% matching funds expended by

the Tribes during that period. The

Federal Government met its trust

responsibility by insuring that Indian oil

and gas leases were inspected to the

standards of FOGRMA. The BLM

expended no less on these functions

when they were undertaken by Tribes

than it did when it performed them

directly and continued to take an active

oversight role to assure the trust

responsibility was met.

Nor did BLM compel any Tribe to

undertake these functions. By agreeing

to match the Federal funding, the

participating Tribes gave their mineralowning members a higher level of

service than required by the trust

responsibility. Neither the trust

responsibility, nor FOGRMA, requires

BLM to fund 100% of reasonable Tribal

costs under a cooperative agreement,

but BLM is now willing to do so.

One commenter stated that funding to

support Tribal cooperative agreements

should be appropriated under a separate

allocation in BLM’s budget. The

commenter believed that otherwise it

may be a low priority. The method BLM

uses to allocate its funds is beyond the

scope of this regulation and is not
Federal Register / Vol. 62, No. 183 / Monday, September 22, 1997 / Rules and Regulations 49583

addressed in the final rule, however,

BLM’s internal budget directives require

that cooperative agreements be funded.

One commenter said that eliminating

the applicability of Section 202 of

FOGRMA to Federal lands is not

necessary. We disagree. The elimination

of cooperative agreements on Federal

lands is required by section 8(a) of

FOGRSFA. BLM can not undo by

regulation what Congress has done by

statute. BLM did not adopt this

comment.

Specific Comments

Section 3192.1 describes cooperative

agreements and when BLM will enter

into a cooperative agreement. BLM will

enter into cooperative agreements with

Tribes or States to conduct inspection,

investigation or enforcement activities

on producing Indian oil and gas leases.

BLM will enter into a cooperative

agreement with a State to inspect oil

and gas leases on Indian lands only with

the permission of the Tribe with

jurisdiction over the lands.

Two commenters asked if § 3192.1(b)

included allotted lands. One commenter

asked if BLM would enter into a

cooperative agreement if it only applied

to allotted lands, and if so, whether or

not BLM would still require permission

from the Tribe even though Tribal lands

would not be impacted. The definition

of Indian lands provided by FOGRMA

includes allotted lands, therefore,

§ 3192.1(b) includes allotted lands and

BLM would enter into a cooperative

agreement even if it only applied to

allotted lands. We added the words

‘‘Indian lands’’ to the final rule for

clarification. The requirement that

Tribal permission be obtained is

statutory. Therefore if a State wanted to

enter into a cooperative agreement

involving allotted lands, BLM would

require the State to obtain the

permission of the Tribe with

jurisdiction over the lands.

Section 3192.2 states that the Tribal

chairman or other authorized official of

any Tribe with producing oil and gas

leases may enter into a cooperative

agreement and that Tribes may join

together to apply for a multi-tribal

cooperative agreement. It also provides

for the governor of a State to enter into

a cooperative agreement involving

Indian lands with the permission of the

Tribe having jurisdiction over the lands.

One commenter asked that the word

‘‘chairman’’ in § 3192.2(a) be replaced

with ‘‘chairperson.’’ We agree, and the

final rule adopts the comment. Another

commenter asked if the Tribe would be

required to have producing oil or gas

leases, or Indian Mineral Development

Act of 1982 (25 U.S.C. 2101 et seq.)

(IMDA) agreements, before it can enter

into an agreement to inspect oil and gas

leases. Section 3192.2(a) only authorizes

Tribes with producing oil and gas leases

or IMDA agreements on Indian lands

under their jurisdiction to apply for a

cooperative agreement.

One commenter stated that if

individually owned/allotted land is to

be included, BLM, the Tribe and the

State should advise the individual

Indian landowners of the agreement

with the State. Section 3192.3(c) already

requires the written consent of all

individual land owners for such lands

to be included in an agreement.

Section 3192.3 requires the applicant

to submit completed Standard Forms

424, 424A, and 424B. It requires a

description of the type and extent of

activities proposed and the dates the

proposed agreement takes effect. It also

states that allotted lands may be

included in an agreement with the

allottee’s written consent.

Several comments were received

relating to the requirement to have the

allottee’s written consent. One

commenter stated that obtaining the

permission of the Tribes and allottees is

important. One commenter believed that

BLM and the Tribe should be required

to obtain the written consent of 100% of

the individuals owning undivided

fractional interests in each allotment/

tract. The commenter also said that the

number of consents, as well as the

written consents, must be verified by

the Bureau of Indian Affairs (BIA) prior

to individually owned land being

included in an agreement. Section

3192.3(c) of the regulations requires the

written consent of all individual Indian

land owners for their lands to be

included in an agreement. Section

3192.3 has been modified to indicate

that BLM will ask BIA to verify that the

written consents obtained by a Tribe or

State include 100% of the owners of

record of each individual Indian tract.

One commenter stated that ‘‘there are

no allottees living at this time’’ and that

the regulations are not consistent with

Mustang v. Cheyenne-Arapaho, 2 Okla.

Trib. 158 (1991) and Mustang

Production Company v. Harrison, 94 F.

3d 1382 (10 Cir. 1996); certiorari denied

117 S. Ct. 1288 (1997). There are still

allottees living in some areas of the

country, so BLM did not adopt that part

of the comment and the word ‘‘allottee’’

has not been deleted. In order to clarify

the statement in the case of leases that

have passed on to the heirs of the

original allottee, we amended the

language to include heirs of allottees in

§ 3192.3(c) and elsewhere, as

appropriate. The Mustang decision as

well as the Federal decision relates to

governmental authority. BLM has made

a policy decision to give individual land

owners a say over who will manage and

inspect their property, which is a

property management function rather

than a governmental function.

Section 3192.4 states that cooperative

agreements may be in effect for between

1–5 years, depending upon the

agreement. This section remains as

proposed since we received no

comments on this section.

Section 3192.5 describes the

requirements for modifying a

cooperative agreement. Both parties

must agree to the modification in

writing before a modification is

effective. For State cooperative

agreements involving Indian lands,

where the proposed modification would

affect the duration or scope of an

agreement, the State must obtain the

Tribe’s written consent.

One commenter asked if an affected

allottee would be required to provide

written consent to a proposed

modification impacting the duration or

scope of a cooperative agreement. Any

proposed modification to an agreement

involving allottees/heirs that affects the

duration or scope of an agreement

would require written permission of the

affected allottee/heirs. In the final rule

section 3192.5 the word ‘‘both’’ has

been changed to ‘‘all.’’ The section has

also been changed to include a reference

to allottees/heirs.

Section 3192.6 cross-references

§ 3190.1 of this part where the

requirements relating to a Tribe or State

receiving proprietary data from BLM

under a cooperative agreement are

located. The requirements for evaluating

requests for proprietary data are found

at 43 CFR 3190.1. BLM received no

comments on this section and it remains

as proposed.

Section 3192.7 states the requirements

for spending the money a Tribe receives

under a cooperative agreement. Such

money may only be used for costs

incurred which are directly related to

the activities carried out under an

agreement. BLM received no comments

on this section and it remains as

proposed.

Section 3192.8 states that activities

under a cooperative agreement may be

subcontracted with BLM’s written

approval.

One commenter recommended that an

alternative to BLM entering into a

cooperative agreement with a State to

inspect Indian oil and gas operations

would be for BLM to enter into a

cooperative agreement with the Tribe,

and the Tribe subcontract to the State.

Section 3192.8 already provides that
49584 Federal Register / Vol. 62, No. 183 / Monday, September 22, 1997 / Rules and Regulations

activities may be subcontracted with

BLM’s written consent.

Section 3192.9 describes the terms

that Tribes or States must include in

cooperative agreements. The

cooperative agreement must state the

purpose, objective and authority;

contain definitions of terms used in an

agreement; describe the lands covered

in an agreement; describe the roles and

responsibilities of BLM and the Tribe or

State; describe the activities that will be

carried out under an agreement; and

define minimum performance

standards. Agreements must include

provisions to protect proprietary data;

prevent conflict of interest; provide for

sharing of civil penalties; and provide

for termination of the agreement.

Agreements must identify BLM and

Tribal or State contacts and provide for

the avoidance of duplication of effort.

Agreements must list schedules for

inspection activities; training; periodic

reviews and meetings. Agreements must

specify the limit on the dollar amount

of Federal funding; describe procedures

for payment or reimbursement; and

describe allowable costs and plans for

BLM oversight.

One commenter referenced

§ 3192.9(j)(1) and asked if BLM has the

capability of thoroughly training Tribal

personnel on a continuing basis as

positions are vacated and filled with

new personnel. The commenter also

stated that where individually owned/

allotted land is concerned, BLM should

absolutely guarantee that inspections be

made on that land either by qualified

Tribal personnel or BLM personnel.

BLM training provides for formal

classroom instruction, on-the-job

training and certification of inspectors

before they are allowed to conduct

independent inspections on Federal or

Indian lands. Section 3192.14 of this

regulation requires that Tribal

inspectors go through the same training

and certification procedure as BLM

inspectors to ensure that only qualified

personnel conduct inspections.

Section 3192.10 cross-references the

list of allowable costs under cooperative

agreements in 43 CFR subpart 12,

identifies the level of funding for

cooperative agreements and states

requirements related to funding

cooperative agreements.

One commenter stated that where

BLM turns over the program, the

recipient Tribe should be allocated

sufficient Federal funds to perform the

assumed tasks. Currently, and under

these regulations, funding for

cooperative agreements is based on

costs associated with activities carried

out under the agreement and is

negotiated between the Tribe and BLM.

One commenter requested that the

amount of funding provided to a Tribe

under a cooperative inspection

agreement be equal to the amount of

funding they would receive from the

Minerals Management Service under its

cooperative audit agreement. The

commenter also requested that BLM

seek input from, and involve Tribes in,

BLM’s fiscal year budgeting process for

the cooperative agreements. By law,

BLM can only fund its agreements for

those costs directly required to carry out

the program. Costs must be based on the

activities carried out by the Tribe under

the agreement, and cannot be based on

what the Tribe is receiving from another

agency under a different program. BLM

did not adopt that part of the comment.

Each year BLM requests input from

Tribes participating in the cooperative

agreement program on the amount of

funding needed for the next year’s

agreement. Therefore, we believe that

Tribes already are involved in BLM’s

budget process to the extent that is

necessary.

Section 3192.11 describes the

conditions under which civil penalties

are shared between a Tribe and BLM.

One commenter stated that this

section is misleading in that the first

sentence implies that civil penalties are

shared equally, then it goes on to say

something different. The commenter

recommended that the first sentence be

deleted and the last sentence be

expanded to include equal sharing of

civil penalties after exceeding the

amount of Federal funding. We agree

that the language may be confusing.

This section has been rewritten.

Section 3192.12 identifies the

activities that may be carried out under

cooperative agreements and the

conditions under which they may be

carried out. Such activities include

inspections, issuing Notices of NonCompliance, issuing Notices to Shut

Down Operations, conducting

investigations, and conducting oil

transporter inspections.

One commenter asked if Tribes could

conduct inspection, investigation or

enforcement activities on producing

Federal and State oil and gas leases

within the Indian Tribe’s jurisdiction.

Section 8(a) of FOGRSFA eliminates

cooperative agreements on Federal

lands which effectively eliminates a

Tribe’s ability to enter into these type of

agreements.

One commenter had several questions

relating to split-estate lands where the

Federal government owns the mineral

estate and a Tribe owns the surface. The

questions were: whether a State could

enter into a cooperative agreement with

the permission of the Tribe involved, to

conduct inspection and enforcement for

Federal oil and gas leases; whether an

Indian Tribe could inspect such Federal

leases under a cooperative agreement;

and whether such lands could be

included in a delegation of authority to

States under Section 205 of FOGRMA.

Section 8(a) of FOGRSFA eliminates

cooperative agreements on Federal

lands. Although FOGRSFA does not

specifically address split-estate

situations, BLM interprets the term

‘‘Federal lands’’ as applying to all

Federal mineral interests. As such,

Federal leases involving split-estate

lands of the type to which the

commenter refers would not be

included in a cooperative agreement.

BLM will allow inclusion of Federal

leases involving split-estate lands in a

delegation of authority to a State.

One commenter stated that

§ 3192.12(a) should reference Tribal and

allotted oil and gas leases if allotted

leases are part of the cooperative

agreement. We agree; this section has

been changed to include allotted lands.

Section 3192.13 identifies those

activities that cannot be carried out by

a Tribe or State, but which must remain

BLM’s responsibility. These include

issuing Notices of Non-compliance that

involve monetary assessments and

penalties; collecting assessments and

penalties; calculating and distributing

shared civil penalties; training and

certifying Tribal and State inspectors;

and issuing and regulating inspector

identification cards and identifying

leases to be inspected (taking into

account priorities of the Tribe). Section

3192.13(b) reserves BLM’s right to enter

lease sites to conduct inspections,

enforcement, investigations or other

activities necessary to supervise lease

operations.

One commenter thought that BLM

needed to explain what we meant by

‘‘control’’ under § 3192.13(5) ‘‘Issue and

control inspector identification cards.’’

We agree that the word ‘‘control’’ in this

context is vague and in the final rule

‘‘control’’ has been changed to

‘‘regulate.’’ By using the term ‘‘regulate’’

BLM means that we will control the use

and possession of inspector

identification cards. For example, if an

inspector is decertified or leaves the

inspection program, BLM will require

that the inspector return the

identification card to BLM.

One commenter asked that if allotted

leases are included in a cooperative

agreement, whether BLM would take

into account the allottee’s priorities.

Due to the large number of allottees and

heirs that may be involved, it is

impractical for BLM to consult all of the

allottees/heirs on an annual basis.
Federal Register / Vol. 62, No. 183 / Monday, September 22, 1997 / Rules and Regulations 49585

However, BLM will consult with BIA

concerning priorities for allotted lands.

Section 3192.13(a)(6) has been changed

to include consultation with BIA to

determine priorities on allotted lands.

Section 3192.14 describes the

certification requirements that Tribal or

State inspectors must meet before BLM

will authorize them to conduct activities

under a cooperative agreement. It also

describes conflict of interest restrictions

for Tribal and State inspectors. BLM

received no comments on this section

and it remains as proposed.

Section 3192.15 describes the

conditions under which a cooperative

agreement may be terminated by mutual

agreement or unilaterally by BLM. BLM

received no comments on this section,

however, BLM added language to make

it clear that a Tribe may unilaterally

terminate a cooperative agreement.

Unilateral terminations on the part of

the Tribe are effective 60 days after BLM

receives written notice that the Tribe is

terminating the agreement. The 60 days

is to allow BLM time to ensure proper

staffing exists to fill the void left by the

terminated agreement.

Section 3192.16 describes the

notification process BLM will follow

where BLM plans to terminate an

agreement unilaterally.

One commenter recommended

changing § 3192.16(a) to read ‘‘* * *

BLM must send a notice to you that lists

the reasons why BLM plans to terminate

the agreement’’ to make it more clear.

BLM adopted this recommendation with

only minor wording changes.

One commenter asked if there was a

time frame within which the impacted

Tribe or State must submit its plan for

correction under § 3192.16(b). This

section has been modified and under

the final rule, Tribes and States have 30

days to submit a plan for correction.

This time frame may be extended at the

request of the Tribe or State.

One commenter asked if under

§ 3192.16(c) BLM has a time frame

within which to make a decision to

either approve or disapprove the plan.

The commenter also asked that if BLM

does not approve the plan, will BLM

provide the impacted State or Tribe

another opportunity to submit another

plan for approval, or is it left up to the

appeal process. BLM added a new

sentence to § 3192.16(b) that provides

for a 30-day BLM review. BLM also

changed § 3192.16(d) and (e) to indicate

that a second opportunity is available to

correct errors in the first submission.

Under the final rule, if the State or Tribe

does not correct the problem(s) within

60 days of the second notice, the

agreement terminates.

Section 3192.17 describes what BLM

requires to reinstate a cooperative

agreement that was terminated either by

mutual consent or unilaterally by BLM.

There were no changes to this section in

the final rule since we received no

comments on this section.

Section 3192.18 states that adversely

affected Tribes and States may appeal a

BLM decision and describes where in 43

CFR the provision for appealing a BLM

decision are found. This section was

revised to conform to other appeals

provisions in this title.

Effective Date

The Administrative Procedure Act

(APA) (5 U.S.C. 553(d)) generally

requires that newly promulgated

regulations not take effect until 30 days

after publication to allow regulated

entities time to bring their programs into

compliance with the new regulations.

However, section 553(d)(3) allows

regulations to take effect in less than 30

days for good cause shown. BLM does

not believe that the 30 day rule should

apply to these regulations and believes

that for good cause they should take

effect immediately.

The primary change from existing

requirements that these regulations

implement is an increase in funding

from BLM. In order for the regulated

community to take full advantage of the

increase in funding these regulations

provide, they must take effect before the

beginning of the next fiscal year.

Furthermore, this rule does not contain

provisions that require regulated entities

to modify their programs to come into

compliance with the new regulations.

BLM is prepared to immediately

increase funding for the cooperative

agreement program. The Department of

the Interior, therefore, for good cause

finds under 5 U.S.C. 553(d)(3) that this

rule may take effect upon publication.

Compliance With the National

Environmental Policy Act

It is hereby determined that this final

rule does not constitute a major Federal

action significantly affecting the quality

of the human environment, and that no

detailed statement pursuant to section

102(2)(C) of the National Environmental

Policy Act (NEPA) of 1969 (42 U.S.C.

4332(2)(C) is required. It has been

determined that this final rule is

categorically excluded from further

environmental review pursuant to 516

Departmental Manual (DM), Chapter 2,

Appendix 1, Item 1.10. This item states

that ‘‘Policies, directives, regulations,

and guidelines of an administrative

financial, legal, technical or procedural

nature * * *’’ are categorically exempt.

Because this rule addresses the financial

aspects of the Bureau’s cooperative

inspection agreement program and

implements a statutory modification in

the program authority, we believe that it

falls into this category, thereby

obviating any further review under

NEPA. It has also been determined that

the rule would not significantly affect

the 10 criteria for exceptions listed in

516 DM 2, Appendix 2. Pursuant to the

Council on Environmental Quality

regulations (40 CFR 1508.4) and

environmental policies and procedures

of the Department of the Interior,

‘‘categorical exclusions’’ are actions that

do not individually or cumulatively

have a significant effect on the human

environment and that have been found

to have no such effect in procedures

adopted by a Federal agency and for

which neither an environmental

assessment nor an environmental

impact statement is required.

Compliance With the Paperwork

Reduction Act

This rule does not add new

information collection requirements and

the existing requirements have been

approved by the Office of Management

and Budget (OMB) under OMB approval

numbers 0348–0040, 0348–0043 and

0348–0044.

Compliance With the Regulatory

Flexibility Act

The Department has determined

under the Regulatory Flexibility Act (5

U.S.C. 601 et seq.) that the final rule

will not have a significant economic

impact on a substantial number of small

entities. The reasons for this

determination are that the economic

impacts of the rule are not considered

significant nor will the rule impact a

substantial number of small entities.

The effect of this rule will be to increase

funding for cooperative inspection

agreements from ‘‘up to 50 percent’’ to

‘‘up to 100 percent.’’ Only 5 Tribes

currently participate in the cooperative

agreement program, but there are 29 oil

and gas Tribes eligible to participate.

Potential funding could approach $1

million. However, it would be

speculative for BLM to try to estimate

how many of the non-participating

Tribes may decide to participate as a

result of the increase in funding. It is

unlikely that all of the non-participating

Tribes will elect to enter into this type

of agreement with BLM. Current

funding is approximately $250,000 so

the increase will be approximately

$250,000. For the 5 Tribes currently

participating in the program, individual

increases range from $8,000 to $55,000.

We believe that this funding will have

an insignificant impact on the overall
49586 Federal Register / Vol. 62, No. 183 / Monday, September 22, 1997 / Rules and Regulations

budgets of Tribes with producing oil

and gas leases that qualify for the

program. Therefore, BLM certifies that

this final rule will not have a significant

economic impact on a substantial

number of small entities.

Compliance With the Unfunded

Mandates Reform Act

BLM has determined that this rule is

not significant under the Unfunded

Mandates Reform Act of 1995, because

it will not result in the expenditure by

State, local and Tribal governments, in

the aggregate, or by the private sector, of

$100 million or more in any one year.

Further, this rule will not significantly

or uniquely affect small governments.

Compliance With Executive Order

12612

This final rule will not have a

substantial direct effect on the States, on

the relationship between the national

government and the States, or on the

distribution of power and

responsibilities among the various

levels of government.

Eliminating cooperative agreements

with States for inspection and

enforcement of oil and gas leases on

Federal lands is a requirement of section

8(a) of FOGRSFA. States that are

interested in conducting inspections on

Federal oil and gas leases may still do

so under a Delegation of Authority as

provided in section 205 of FOGRMA (30

U.S.C. 1735).

Therefore, in accordance with

Executive Order 12612, BLM has

determined that this final rule does not

have sufficient federalism implications

to warrant preparation of a Federalism

Assessment.

Compliance With Executive Order

12630

The Department certifies that this

final rule does not represent a

governmental action capable of

interference with constitutionally

protected property rights. It does not

provide for the taking of any property

rights or interests. Therefore, as required

by Executive Order 12630, the

Department of the Interior has

determined that the rule would not

cause a taking of private property.

Compliance With Executive Order

12866

According to the criteria listed in

section 3(f) of Executive Order 12866,

BLM has determined that the final rule

is not a significant regulatory action. As

such, the final rule is not subject to

Office of Management and Budget

review under section 6(a)(3) of the

order.

Compliance With Executive Order

12988

The Department of the Interior has

determined that this rule meets the

applicable standards provided in

sections 3(a) and 3(b)(2) of Executive

Order 12988.

List of Subjects in 43 CFR Part 3192

Administrative practice and

procedure, Authority delegations

(Government agencies), Government

contracts, Indians—lands,

Intergovernmental relations, Mineral

Royalties, Reporting and recordkeeping

requirements.

Accordingly, under the authorities

cited below, and for the reasons stated

in the preamble, part 3190, subchapter

C, chapter II, subtitle B, title 43 of the

Code of Federal Regulations is amended

as follows:

PART 3190—DELEGATION OF

AUTHORITY, COOPERATIVE

AGREEMENTS AND CONTRACTS FOR

OIL AND GAS INSPECTIONS

1. Revise the authority citation to read

as follows:

§ 3190.2–2 [Amended]

Authority: 30 U.S.C. 1735 and 1751.

2. Revise § 3190.2–2(b)(2) to read as

follows:

* * * * *

(b) * * *

(2) Up to 100 percent for a cooperative

agreement.

* * * * *

3. Revise Subpart 3192 of part 3190 to

read as follows:

Subpart 3192—Cooperative Agreements

Sec.

3192.1 What is a cooperative agreement?

3192.2 Who may apply for a cooperative

agreement with BLM to conduct oil and

gas inspections?

3192.3 What must a Tribe or State include

in its application for a cooperative

agreement?

3192.4 What is the term of a cooperative

agreement?

3192.5 How do I modify a cooperative

agreement?

3192.6 How will BLM evaluate my request

for proprietary data?

3192.7 What must I do with Federal

assistance I receive?

3192.8 May I subcontract activities in the

agreement?

3192.9 What terms must a cooperative

agreement contain?

3192.10 What costs will BLM pay?

3192.11 How are civil penalties shared?

3192.12 What activities may Tribes or

States perform under cooperative

agreements?

3192.13 What responsibilities must BLM

keep?

3192.14 What are the requirements for

Tribal or State inspectors?

3192.15 May cooperative agreements be

terminated?

3192.16 How will I know if BLM intends to

terminate my agreement?

3192.17 Can BLM reinstate cooperative

agreements that have been terminated?

3192.18 Can I appeal BLM’s decision?

Subpart 3192—Cooperative

Agreements

§ 3192.1 What is a cooperative agreement?

(a) A cooperative agreement is a

contract between the Bureau of Land

Management (BLM) and a Tribe or State

to conduct inspection, investigation, or

enforcement activities on producing

Indian Tribal or allotted oil and gas

leases.

(b) BLM will enter into a cooperative

agreement with a State to inspect oil

and gas leases on Indian lands only with

the permission of the Tribe with

jurisdiction over the lands.

§ 3192.2 Who may apply for a cooperative

agreement with BLM to conduct oil and gas

inspections?

(a) The Tribal chairperson, or other

authorized official, of a Tribe with

producing oil or gas leases, or

agreements under the Indian Mineral

Development Act of 1982 (25 U.S.C.

2101 et seq.), may apply for a

cooperative agreement with BLM for

Indian lands under the Tribe’s

jurisdiction.

(b) Tribes may join together to apply

for a multi-tribe cooperative agreement.

(c) The Governor of a State having a

Tribal resolution from the Tribe with

jurisdiction over the Indian lands,

permitting the Governor to enter into a

cooperative agreement, may apply for a

cooperative agreement with BLM.

§ 3192.3 What must a Tribe or State

include in its application for a cooperative

agreement?

(a) To apply for a cooperative

agreement you must complete—

(1) Standard Form 424, Application

for Federal Assistance;

(2) Standard Form 424A, Budget

Information—Non-Construction

Programs; and

(3) Standard Form 424B,

Assurances—Non-Construction

Programs.

(b) You must describe the type and

extent of oil and gas inspection,

enforcement, and investigative activities

proposed under the agreement and the

period of time the proposed agreement

will be in effect (See section 11 of

Standard Form 424).

(c) You may include allotted lands

under an agreement with the written

consent of all allottees or their heirs.
Federal Register / Vol. 62, No. 183 / Monday, September 22, 1997 / Rules and Regulations 49587

BLM will ask the Bureau of Indian

Affairs (BIA) to verify that the Tribe or

State has obtained all of the necessary

signatures to commit 100% of each

individual tract of allotted lands to the

agreement.

§ 3192.4 What is the term of a cooperative

agreement?

Cooperative agreements can be in

effect for a period from 1 to 5 years from

the effective date of the agreement, as

set out in the agreement.

§ 3192.5 How do I modify a cooperative

agreement?

You may modify a cooperative

agreement by having all parties to the

agreement consent to the change in

writing. If the agreement is with a State,

and the modification would affect the

duration or scope of the agreement, then

the State must obtain the written

consent of the affected Tribe and/or

allottee or heir.

§ 3192.6 How will BLM evaluate my

request for proprietary data?

BLM will evaluate Tribal or State

requests for proprietary data on a caseby-case basis according to the

requirements of § 3190.1 of this part.

§ 3192.7 What must I do with Federal

assistance I receive?

You must use Federal assistance that

you receive only for costs incurred

which are directly related to the

activities carried out under the

cooperative agreement.

§ 3192.8 May I subcontract activities in the

agreement?

You must obtain BLM’s written

approval before you subcontract any

activities in the agreement with the

exception of financial audits of program

funds that are required by the Single

Audit Act of 1984 (31 U.S.C. 7501 et

seq.).

§ 3192.9 What terms must a cooperative

agreement contain?

The cooperative agreement must—

(a) State its purpose, objective, and

authority;

(b) Define terms used in the

agreement;

(c) Describe the Indian lands covered;

(d) Describe the roles and

responsibilities of BLM and the Tribe or

State;

(e) Describe the activities the Tribe or

State will carry out;

(f) Define the minimum performance

standards to evaluate Tribal or State

performance;

(g) Include provisions to—

(1) Protect proprietary data, as

provided in § 3190.1 of this part;

(2) Prevent conflict of interest, as

provided in § 3192.14(d);

(3) Share civil penalties, as provided

in § 3192.11; and

(4) Terminate the agreement;

(h) List BLM and Tribal or State

contacts;

(i) Avoid duplication of effort

between BLM and the Tribe or State

when conducting inspections;

(j) List schedules for—

(1) Inspection activities;

(2) Training of Tribal or State

inspectors;

(3) Periodic reviews and meetings;

(k) Specify the limit on the dollar

amount of Federal funding;

(l) Describe procedures for Tribes or

States to request payment

reimbursement;

(m) Describe allowable costs subject

to reimbursement; and

(n) Describe plans for BLM oversight

of the cooperative agreement.

§ 3192.10 What costs will BLM pay?

(a) BLM will pay expenses allowed

under part 12, subpart A,

Administrative and Audit Requirements

and Cost Principles for Assistance

Programs, of this title.

(b) BLM will fund the agreements up

to 100 percent of allowable costs.

(c) Funding is subject to the

availability of BLM funds.

(d) Funding for cooperative

agreements is subject to the shared civil

penalties requirement of § 3192.11.

§ 3192.11 How are civil penalties shared?

(a) Civil penalties that the Federal

Government collects resulting from an

activity carried out by a Tribe or State

under a cooperative agreement are

shared equally between the inspecting

Tribe or State and BLM.

(b) BLM must deduct the amount of

the civil penalty paid to the Tribe or

State from the funding paid to the Tribe

or State for the cooperative agreement.

§ 3192.12 What activities may Tribes or

States perform under cooperative

agreements?

Activities carried out under the

cooperative agreement must be in

accordance with the policies of the

appropriate BLM State or field office

and as specified in the agreement, and

may include—

(a) Inspecting Tribal or allotted oil

and gas leases for compliance with BLM

regulations;

(b) Issuing initial Notices of Incidents

of Non-Compliance, Form 3160–9, and

Notices to Shut Down Operations, Form

3160–12;

(c) Conducting investigations; or

(d) Conducting oil transporter

inspections.

§ 3192.13 What responsibilities must BLM

keep?

(a) Under cooperative agreements,

BLM continues to—

(1) Issue Notices of Incidents of

Noncompliance that impose monetary

assessments and penalties;

(2) Collect assessments and penalties;

(3) Calculate and distribute shared

civil penalties;

(4) Train and certify Tribal or State

inspectors;

(5) Issue and regulate inspector

identification cards; and

(6) Identify leases to be inspected,

taking into account the priorities of the

Tribe. Priorities for allotted lands will

be established through consultation

with the BIA office with jurisdiction

over the lands in the agreement.

(b) If BLM enters into a cooperative

agreement, that agreement does not

affect BLM’s right to enter lease sites to

conduct inspections, enforcement,

investigations or other activities

necessary to supervise lease operations.

§ 3192.14 What are the requirements for

Tribal or State inspectors?

(a) Tribal or State inspectors must be

certified by BLM before they conduct

independent inspections on Indian oil

and gas leases.

(b) The standards for certifying Tribal

or State inspectors must be the same as

the standards BLM uses for certifying

BLM inspectors.

(c) Tribal and State inspectors must

satisfactorily complete on-the-job and

classroom training in order to qualify for

certification.

(d) Tribal or State inspectors must

not—

(1) Inspect the operations of

companies in which they, a member of

their immediate family, or their

immediate supervisor, have a direct

financial interest; or

(2) Use for personal gain, or gain by

another person, information he or she

acquires as a result of his or her

participating in the cooperative

agreement.

§ 3192.15 May cooperative agreements be

terminated?

(a) Cooperative agreements may be

terminated at any time if all parties

agree to the termination in writing.

(b) BLM may terminate an agreement

without Tribal or State agreement if

the—

(1) Tribe or State fails to carry out the

terms of the agreement; or

(2) Agreement is no longer needed.

(c) A Tribe may unilaterally terminate

an agreement after notifying BLM. For a

unilateral termination, the agreement

terminates 60 days after the Tribe

notifies BLM.
49588 Federal Register / Vol. 62, No. 183 / Monday, September 22, 1997 / Rules and Regulations

§ 3192.16 How will I know if BLM intends

to terminate my agreement?

(a) If BLM intends to terminate your

agreement because you did not carry out

the terms of the agreement, BLM must

send you a notice that lists the reason(s)

why BLM intends to terminate the

agreement.

(b) Within 30 days after receiving the

notice, you must send BLM a plan to

correct the problem(s) BLM listed in the

notice. BLM has 30 days to approve or

disapprove the plan, in writing.

(c) If BLM approves the plan, you

have 30 days after you receive notice of

the approval to correct the problem(s).

(d) If you have not corrected the

problem within 30 days, BLM will send

you a second written termination notice

that will give you another opportunity

to correct the problem.

(e) If the problem is not corrected

within 60 days after you receive the

second notice, BLM will terminate the

agreement.

§ 3192.17 Can BLM reinstate cooperative

agreements that have been terminated?

(a) If your cooperative agreement was

terminated by consent, you may request

that BLM reinstate the agreement at any

time.

(b) If BLM terminated an agreement

because you did not carry out the terms

of the agreement, you must prove that

you have corrected the problem(s) and

are able to carry out the terms of the

agreement.

(c) For any reinstatement request BLM

will decide whether or not your

cooperative agreement may be

reinstated and, if so, whether you must

make any changes to the agreement

before it can be reinstated.

§ 3192.18 Can I appeal a BLM decision?

Any party adversely affected by a

BLM decision made under this subpart

may appeal the decision in accordance

with parts 4 and 1840 of this title.

Dated: September 16, 1997.

Bob Armstrong,

Assistant Secretary, Land and Minerals

Management.

[FR Doc. 97–25102 Filed 9–19–97; 8:45 am]

BILLING CODE 4310–84–P