Federal Register / Vol. 65, No. 187 / Tuesday, September 26, 2000 / Proposed Rules 57771

DEPARTMENT OF THE INTERIOR

Minerals Management Service

30 CFR Part 208

RIN 1010–AC70

Small Refiner Administrative Fee

AGENCY: Minerals Management Service,

Interior.

ACTION: Proposed rulemaking.

SUMMARY: The Minerals Management

Service (MMS) proposes to eliminate

the fees it recovers from small refiners

participating in the small refiner

royalty-in-kind (RIK) program. MMS

believes that the fees are no longer

justified under the requirements of

Office of Management and Budget

(OMB) Circular No. A–25.

DATES: Comments must be submitted on

or before November 27, 2000.

ADDRESSES: If you wish to comment,

you may submit your comments by any

one of several methods. You may mail

comments to Minerals Management

Service, Royalty Management Program,

Rules and Publications Staff, P.O. Box

25165, MS 3021, Denver, Colorado

80225–0165. You may also comment via

the Internet to

RMP.comments@mms.gov. Please

submit Internet comments as an ASCII

file and avoid the use of special

characters and any form of encryption.

Please also include ‘‘Attn: RIN 1010–

AC70’’ and your name and return

address in your Internet message. If you

do not receive a confirmation that we

have received your Internet message,

contact David S. Guzy, MMS, RMP, at

(303) 231–3432. Finally, you may handdeliver comments to Building 85,

Denver Federal Center, Denver,

Colorado 80225.

FOR FURTHER INFORMATION CONTACT:

David S. Guzy, Chief, Rules and

Publications Staff, Minerals

Management Service, Royalty

Management Program, P.O. Box 25165,

MS 3021, Denver, Colorado 80225–

0165; telephone (303) 231–3432; FAX

(303) 231–3385; e-mail

David.Guzy@mms.gov.

SUPPLEMENTARY INFORMATION: The

principal authors of this proposed rule

are Larry Cobb of the Royalty

Management Program (RMP), MMS, and

Sarah L. Inderbitzin of the Office of the

Solicitor, Department of the Interior.

I. Background

Congress established the small refiner

royalty-in-kind (RIK) program to ensure

a diversified refining base essential for

the national interest and defense.

Regulations at 30 CFR Part 208 define

the MMS process for awarding RIK

volumes to small refiners.

Small refiner eligibility requirements

for onshore leases are defined in 30 CFR

part 208 and are based on the

Emergency Petroleum Allocation Act,

and by regulations of the Small Business

Administration for offshore leases.

Under the small refiner program, MMS

takes its royalty portion of production

from one or more Federal leases ‘‘in

kind’’ (as opposed to taking the royalty

‘‘in value’’ or cash) and sells it to a

qualifying small refiner under an RIK

contract. The goal of the program is to

keep small refiners economically viable

by providing:

1. Access to a crude oil marketplace

where integrated oil companies and

larger refiners account for the majority

of the crude oil traded;

2. A stable source of supply at

equitable prices to sustain operations at

or near normal operating capacity; and

3. A vital source of trade stock,

thereby creating the opportunity to

‘‘exchange’’ royalty oil for the quality or

type of crude oil feed stock needed to

sustain their mix of refined products.

Before recent program changes, small

refiners took delivery of the royalty oil

MMS had awarded them from

designated Federal lessees/producers.

After the lessees reported to MMS the

value of the crude oil they had supplied,

MMS then billed the small refiners

according to those values.

If MMS later determined that the

values lessees reported understated the

market value of the oil, MMS billed the

small refiners for additional payments.

This process created much uncertainty

for both MMS and the small refiners

and, in some cases, threatened the

financial solvency of the small refiners

when they received large bills from

MMS.

MMS required small refiners to pay a

cost recovery fee to cover MMS’s direct

and indirect costs of running the small

refiner program. In 1999, small refiners

paid about $430,000 to cover the

Government’s costs. Because fewer

refiners participated in the program in

1999 than in previous years, their

individual shares of the full cost

increased to cover the entire program.

Small refiners had said they were

dropping out of the program as a result

of the pricing liabilities. Participation in

the program declined from 13 refiners in

1995 to only five in 1999. Refiners cited

the great uncertainty about the ultimate

price of the RIK oil as a major

impediment to the effective operation of

their businesses.

MMS now conducts a competitive

bidding process for all eligible small

refiners. Small refiners must bid on the

oil using market-based prices, and MMS

selects the highest bidders (highest

offered prices) for each RIK sale. The

market-based prices are applicable spot

market prices, with appropriate

location, quality, and market-value

adjustments for a particular area.

The revised program procedures

greatly streamline royalty-in-kind oil

sales resulting in a more efficient,

business-like approach. The process

assures that MMS receives market value

for its in-kind production, provides

small refiners with greater pricing

certainty by avoiding the potential for

retroactive charges, and eliminates the

administrative burdens of value

auditing and billing.

II. Explanatory Information

Because of the new competitive

procedures for selling RIK oil, MMS

receives market value for the oil and,

therefore, believes the cost recovery fee

under 30 CFR 208.4(b)(4) is no longer

justified under the requirements of OMB

Circular No. A–25. Therefore, in this

rulemaking MMS is proposing to

remove the fee provision from the

regulations.

OMB Circular No. A–25 (July 8, 1993)

established guidelines for Federal

agencies to assess fees under the

Independent Offices Appropriation Act

of 1952, 31 U.S.C. 9701, to cover the

costs of Government-provided services

or benefits beyond those accruing to the

general public. In determining the

amount of user fees to assess, section

6a.2.(b) of OMB Circular No. A–25

states:

Except as provided in Section 6c, user

charges will be based on market prices (as

defined in Section 6d) when the Government,

not acting in its capacity as sovereign, is

leasing or selling goods or resources, or is

providing a service (e.g., leasing space in

federally owned buildings). Under these

business-type conditions, user charges need

not be limited to the recovery of full cost and

may yield net revenues.

Section 6.d.2. describes market price

as the price for a good, resource, or

service that is based on competition in

open markets, and creates neither a

shortage nor a surplus of the good,

resource, or service. Under the current

RIK program, MMS: (1) Is not acting in

its capacity as a sovereign in the sale of

RIK oil, and (2) is receiving market

prices for the oil. When disposing of the

RIK production under a contractual

agreement in the market place, MMS

acts in the same manner as other entities

selling production in the marketplace.

That is, MMS’s role as a seller of RIK

production to small refiners is divorced

57772 Federal Register / Vol. 65, No. 187 / Tuesday, September 26, 2000 / Proposed Rules

from its role as lessor in receiving RIK

production from Federal lessees.

Further, OMB Circular No. A–25

states that when a substantial

competitive demand exists for a good,

resource, or service its market price will

be determined using commercial

practices, for example:

(1) competitive bidding; or

(2) by reference to prevailing prices in

competitive markets for goods,

resources, or services that are the same

or similar to those provided by the

Government * * * with adjustments as

appropriate that reflect demand, level of

service, and the quality of the good or

service.

OMB guidelines do not limit Federal

agencies to the recovery of actual costs

when disposing of goods that have

market value. Under procedures now in

place, by receiving market value, MMS

will not only recover the value of the oil

sold but also the direct and indirect

costs of conducting the sale. Therefore,

MMS is in compliance with OMB

guidelines and does not need to assess

a separate cost recovery fee for the small

refiner program.

Accordingly, MMS proposes to

discontinue assessing the cost recovery

fees currently recovered under 30 CFR

208.4(b)(4) by removing that paragraph

in the regulation.

III. Procedural Matters

1. Public Comment Policy

Our practice is to make comments,

including names and home addresses of

respondents, available for public review

during regular business hours and on

our Internet site at www.rmp.mms.gov.

Individual respondents may request that

we withhold their home address from

the rulemaking record, which we will

honor to the extent allowable by law.

There also may be circumstances in

which we would withhold from the

rulemaking record a respondent’s

identity, as allowable by law. If you

wish us to withhold your name and/or

address, you must state this

prominently at the beginning of your

comments. However, we will not

consider anonymous comments. We

will make all submissions from

organizations or businesses, and from

individuals identifying themselves as

representatives or officials of

organizations or businesses, available

for public inspection in their entirety.

2. Summary Cost and Benefit Data

We have summarized below the

economic impacts of this rule to the

three affected groups: industry, State

and local governments, and the Federal

Government. This cost and benefit

information in this Item 2 of Procedural

Matters is used as the basis for the

Departmental certifications in Items 3–

11.

A. Industry

The revised small refiners royalty-inkind program and this associated rule

will benefit small refiners by—

• Eliminating the separate cost

recovery fee;

• Providing certainty in the prices

they will pay for the royalty oil; and

• Reducing administrative costs due

to a more efficient, commercial-like

sales procedure.

B. State and Local Governments

Currently, only oil produced from

offshore leases is offered for sale in the

small refiner RIK program. States are

unaffected by the offshore RIK program

because only those offshore leases

where 100 percent of the royalty

revenues belongs to the Federal

Government are designated for

inclusion in the program. Should the

small refiner program be expanded to

onshore leases, States will incur their

pro rata share of the cost of

administering the onshore portion of the

RIK program and will receive their share

of royalties, per applicable revenue

distribution formulas.

C. Federal Government

With the changes to the RIK program

that created the need for this rule, MMS

will no longer have to rely on prices

reported by third-parties and impose

separate cost recovery fees because it

will receive full market value for its

royalty oil. Moreover, because it will

now recover market value, MMS

believes that the financial impact to the

government of the elimination of the

cost recovery fee, if any, will be

nominal.

Also, MMS will achieve

administrative savings because it will

no longer have to take action to collect

the additional monies owed by small

refiners when later audits show that

prices quoted by lessees understated the

oil’s market value.

3. Regulatory Planning and Review (E.O.

12866)

This document is not a significant

rule and is not subject to review by the

Office of Management and Budget under

Executive Order 12866.

(1) This rule will not have an effect of

$100 million or more on the economy.

It will not adversely affect in a material

way the economy, productivity,

competition, jobs, the environment,

public health or safety, or State, local,

or tribal governments or communities.

(2) This rule will not create a serious

inconsistency or otherwise interfere

with an action taken or planned by

another agency.

(3) This rule does not alter the

budgetary effects of entitlements, grants,

user fees, or loan programs or the rights

or obligations of their recipients.

(4) This rule does not raise novel legal

or policy issues.

4. Regulatory Flexibility Act

The Department of the Interior

certifies that this document will not

have a significant adverse effect on a

substantial number of small entities

under the Regulatory Flexibility Act (5

U.S.C. 601 et seq.).

Alternatively, the small refiner

program provides noteworthy benefits

to eligible small refiners including:

• Access to a crude oil marketplace

where the major integrated oil

companies and large refiners account for

the majority of the crude oil traded;

• A stable source of supply at

equitable market-based prices which

helps the small refiner sustain

operations at or near normal operating

capacity; and

• A vital source of trade stock,

thereby creating the opportunity to

‘‘exchange’’ royalty oil for the quality or

type of crude oil feed stock needed to

sustain their mix of refined products.

Your comments are important. The

Small Business and Agricultural

Regulatory Enforcement Ombudsman

and 10 Regional Fairness Boards were

established to receive comments from

small businesses about Federal agency

enforcement actions. The Ombudsman

will annually evaluate the enforcement

activities and rate each agency’s

responsiveness to small business. If you

wish to comment on the enforcement

actions in this rule, call 1–888–734–

3247.

5. Small Business Regulatory

Enforcement Act (SBREFA)

This rule is not a major rule under 5

U.S.C. 804(2), the Small Business

Regulatory Enforcement Fairness Act.

This rule:

a. Does not have an annual effect on

the economy of $100 million or more.

b. Will not cause a major increase in

costs or prices for consumers,

individual industries, Federal, State, or

local government agencies, or

geographic regions.

c. Does not have significant adverse

effects on competition, employment,

investment, productivity, innovation, or

the ability of U.S.-based enterprises to

compete with foreign-based enterprises.

Federal Register / Vol. 65, No. 187 / Tuesday, September 26, 2000 / Proposed Rules 57773

6. Unfunded Mandates Reform Act

This rule does not impose an

unfunded mandate on State, local, or

tribal governments or the private sector

of more than $100 million per year. The

rule does not have a significant or

unique effect on State, local, or tribal

governments or the private sector. A

statement containing the information

required by the Unfunded Mandates

Reform Act (2 U.S.C. 1531 et seq.) is not

required.

7. Takings (E.O. 12630)

In accordance with Executive Order

12630, this proposed rule does not have

significant takings implications. This

rule does not impose conditions or

limitations on the use of any private

property; consequently, a takings

implication assessment is not required.

8. Federalism (E.O. 13132)

In accordance with Executive Order

13132, this proposed rule does not have

Federalism implications. This rule does

not substantially or directly affect the

relationship between the Federal and

State governments or impose costs on

States or localities.

9. Civil Justice Reform (E.O. 12988)

In accordance with Executive Order

12988, the Office of the Solicitor has

determined that this rule does not

unduly burden the judicial system and

meets the requirements of sections 3(a)

and 3(b)(2) of the Order.

10. Paperwork Reduction Act of 1995

This proposed rule does not contain

an information collection, as defined by

the Paperwork Reduction Act, and the

submission of Office of Management

and Budget Form 83–I is not required.

11. National Environmental Policy Act

This rule does not constitute a major

Federal action significantly affecting the

quality of the human environment. A

detailed statement under the National

Environmental Policy Act of 1969 is not

required.

List of Subjects

Continental shelf, Government

contracts, Mineral royalties, Natural gas,

Petroleum, Public lands—mineral

resources.

Dated: September 18, 2000.

Sylvia V. Baca,

Assistant Secretary—Land and Minerals

Management.

For reasons set forth in the preamble,

MMS proposes to amend 30 CFR part

208 as follows:

PART 208—SALE OF FEDERAL

ROYALTY OIL

1. The authority citation for part 208

continues to read as follows:

Authority: 5 U.S.C. 301 et seq.; 30 U.S.C.

181 et seq., 351 et seq., 1701 et seq.; 31 U.S.C.

9701; 41 U.S.C. 601 et seq.; 43 U.S.C. 1301

et seq., 1331 et seq., and 1801 et seq.

2. In § 208.4, remove paragraph (b)(4).

[FR Doc. 00–24594 Filed 9–25–00; 8:45 am]

BILLING CODE 4310–MR–P

MORRIS K. UDALL SCHOLARSHIP

AND EXCELLENCE IN NATIONAL

ENVIRONMENTAL POLICY

FOUNDATION

36 CFR Part 1600

RIN 3320–AA02, 3320–AA00

Public Availability of Information and

the Privacy Act; Implementation

AGENCY: Morris K. Udall Scholarship

and Excellence in National

Environmental Policy Foundation.

ACTION: Proposed rule.

SUMMARY: This document sets forth the

proposed implementation regulations of

the Morris K. Udall Scholarship and

Excellence in National Environmental

Policy Foundation (the Foundation)

under the Freedom of Information Act

(FOIA) and Privacy Act.

DATES: Submit comments on or before

October 26, 2000.

ADDRESSES: Address all comments

concerning this proposed rule to

General Counsel, Morris K. Udall

Foundation, 110 South Church Avenue,

Suite 3350, Tucson, Arizona 85701–

1650.

FOR FURTHER INFORMATION CONTACT:

Ellen K. Wheeler, General Counsel, at

(520) 670–5299.

SUPPLEMENTARY INFORMATION: These

proposed regulations implement the

Freedom of Information Act (FOIA), 5

U.S.C. 552, as amended by the

Electronic Freedom of Information Act

Amendments of 1996 (Pub. L. 104–231),

and the Privacy Act of 1974, 5 U.S.C.

552a. They apply to all Foundation

programs, including the U.S. Institute

for Environmental Conflict Resolution

(USIECR). The Foundation proposes the

following set of regulations to discharge

its responsibilities under the FOIA and

Privacy Act. The FOIA establishes:

Basic procedures for public access to

agency records and guidelines for

waiver or reduction of fees the agency

would otherwise assess for the response

to the records request; categories of

records that are exempt for various

reasons from public disclosure; and

basic requirements for federal agencies

regarding their processing of and

response to requests for agency records.

The Privacy Act establishes: Basic

procedures for individuals’ access to all

records in systems of records

maintained by the Foundation that are

retrieved by an individual’s name or

personal identifier. These proposed

rules describe the procedures by which

individuals may request access to

records about themselves, request

amendment or correction of those

records, and request an accounting of

disclosures of those records by the

Foundation. The Foundation invites

comments from interested groups and

members of the public on these

proposed regulations.

Regulatory Flexibility Act

The Foundation, in accordance with

the Regulatory Flexibility Act (5 U.S.C.

606(b)), has reviewed this regulation

and by approving it certifies that this

regulation will not have a significant

economic impact on a substantial

number of small entities. Under the

Freedom of Information Act, agencies

may recover only the direct costs of

searching for, reviewing, and

duplicating the records processed for

requesters. Thus, fees assessed by the

Foundation will be nominal. Further,

the ‘‘small entities’’ that make FOIA

requests, as compared with individual

requesters and other requesters, are

relatively few in number.

Unfunded Mandates Reform Act of

1995

This rule will not result in the

expenditure by State, local, and tribal

governments, in the aggregate, or by the

private sector, of $100,000,000 or more

in any one year, and it will not

significantly or uniquely affect small

governments. Therefore, no actions were

deemed necessary under the provisions

of the Unfunded Mandates Reform Act

of 1995.

List of Subjects in 36 CFR Part 1600

Administrative practice and

procedure, Freedom of information,

Privacy.

For the reasons set forth in the

preamble, the Morris K. Udall

Foundation proposes to amend Title 36

CFR by adding a new Chapter XVI

consisting of Part 1600 to read as

follows: