62612 Federal Register / Vol. 65, No. 203 / Thursday, October 19, 2000 / Rules and Regulations

Subpart I—North Carolina

2. Section 1952.154 is amended by

revising paragraph (b) to read as follows:

§ 1952.154 Final approval determination.

* * * * *

(b) Except as otherwise noted, the

plan which has received final approval

covers all activities of employers and all

places of employment in North

Carolina. The plan does not cover

Federal government employers and

employees; the U.S. Postal Service

(USPS), including USPS employees, and

contract employees and contractoroperated facilities engaged in USPS mail

operations; the American National Red

Cross; private sector maritime activities;

employment on Indian reservations;

enforcement relating to any contractors

or subcontractors on any Federal

establishment where the land has been

ceded to the Federal Government;

railroad employment; and enforcement

on military bases.

* * * * *

3. Section 1952.155 is amended by

revising paragraph (b)(1) to read as

follows:

§ 1952.155 Level of Federal enforcement.

* * * * *

(b)(1) In accordance with section

18(e), final approval relinquishes

Federal OSHA authority only with

regard to occupational safety and health

issues covered by the North Carolina

plan. OSHA retains full authority over

issues which are not subject to State

enforcement under the plan. Thus,

Federal OSHA retains its authority

relative to safety and health in private

sector maritime activities and will

continue to enforce all provisions of the

Act, rules or orders, and all Federal

standards, current or future, specifically

directed to private sector maritime

activities (occupational safety and

health standards comparable to 29 CFR

Parts 1915, shipyard employment; 1917,

marine terminals; 1918, longshoring;

and 1919; gear certification, as well as

provisions of general industry and

construction standards (29 CFR Parts

1910 and 1926) appropriate to hazards

found in these employments);

employment on Indian reservations;

enforcement relating to any contractors

or subcontractors on any Federal

establishment where the land has been

ceded to the Federal Government;

railroad employment, not otherwise

regulated by another Federal agency;

and enforcement on military bases.

Federal jurisdiction is also retained with

respect to Federal government

employers and employees; the U.S.

Postal Service (USPS), including USPS

employees, and contract employees and

contractor-operated facilities engaged in

USPS mail operations; and the

American National Red Cross.

* * * * *

[FR Doc. 00–26946 Filed 10–18–00; 8:45 am]

BILLING CODE 4510–26–P

DEPARTMENT OF THE INTERIOR

Minerals Management Service

30 CFR Part 206

RIN 1010–AC72

Amendments to Gas Valuation

Regulations for Indian Leases

AGENCY: Minerals Management Service

(MMS), Interior.

ACTION: Final rule.

SUMMARY: MMS is removing the special

timing requirements for adjustments

and audits of royalties on gas produced

from Indian leases in Montana and

North Dakota. If not removed, these

timing requirements could force tribal

and MMS auditors to expend additional

time and money or postpone ongoing

audits to meet the restricted time

periods. Removing these timing

restrictions should increase royalties

collected for Indian leases in these

States.

DATES: The effective date of this final

rule is November 20, 2000.

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, CO 80225–0165;

telephone (303) 231–3432; fax (303)

231–3385; or e-mail

David.Guzy@mms.gov.

SUPPLEMENTARY INFORMATION: The

principal author of this final rule is

Richard Adamski, Royalty Valuation

Division, Royalty Management Program

(RMP), MMS.

I. Background

On August 10, 1999, MMS published

a final rule titled ‘‘Amendments to Gas

Valuation Regulations for Indian

Leases,’’ (64 FR 43506) with an effective

date of January 1, 2000. These

regulations apply to all gas production

from Indian (tribal or allotted) oil and

gas leases (except leases on the Osage

Indian Reservation). The new

regulations resulted from a negotiated

rulemaking among Indian tribes and

allottees, the oil and gas industry, and

MMS.

Among the newly adopted regulations

was a provision at 30 CFR 206.174(l)

requiring that for Indian leases in

Montana and North Dakota, lessees

must make adjustments to reported

royalty values sooner, and MMS must

complete its audits sooner, than either

has done historically. This provision

does not apply to Indian leases in other

States.

The final rule limited the adjustment

and audit period for Indian leases in

Montana and North Dakota because,

unlike most other producing regions,

there are no acceptable published

indexes applicable to that area (64 FR

43510). Accordingly, in areas such as

Montana and North Dakota, valuation

must be based on other criteria that are

more difficult to determine than index

prices.

After the final rule was promulgated,

tribal auditors informed MMS that the

special timing requirements at 30 CFR

206.174(l) could force tribal and MMS

auditors to expend additional time and

money or postpone ongoing audits in

Montana and North Dakota to meet the

restricted time periods. Moreover, MMS

believes that the reason for only placing

time limits on Indian leases in Montana

and North Dakota is not compelling.

Consequently, on June 15, 2000, MMS

published a proposed rulemaking (65

FR 37504) to remove the requirements.

The proposed rulemaking provided for

a 30-day comment period that ended

July 17, 2000.

II. Comments on Proposed Rule

During the comment period for the

proposed rule, MMS received two

written comments: one from an Indian

tribe (tribe) and one from industry. After

careful consideration of the comments,

MMS has decided to issue this final rule

removing the special timing

requirements for adjustments and audits

of royalties on gas produced from Indian

leases in Montana and North Dakota.

This amendment to the regulations will

apply prospectively to gas produced on

or after the effective date specified in

the DATES section above.

General Comments

The industry commenter opposed the

removal of the time limitations. The

commenter believes that industry

received the earlier valuation certainty

in return for agreeing to an increase in

the major portion calculation percentage

to the 75th percentile. The commenter

suggested that if MMS removes the

adjustment and audit time limits then

MMS should also change the major

portion calculation to reflect the

historical major portion value at the

50th percentile.

Federal Register / Vol. 65, No. 203 / Thursday, October 19, 2000 / Rules and Regulations 62613

The tribal commenter supported the

proposed amendments. As stated

previously, the final rule limited the

adjustment and audit period for Indian

leases in Montana and North Dakota

because there are no acceptable

published indexes applicable to that

area. The tribal commenter believes that

the lack of such an index means that the

determination of value will take more

time, not less time, in the audit process.

Response. MMS and tribal auditors

must retain the discretion to allocate

audit resources to obtain the best data

when that data becomes available. MMS

believes that even without absolute time

limits, industry is still afforded the

certainty of a binding major portion

value and no late-payment interest on

any underpayment until that major

portion value is due. Indian members of

the Indian Negotiated Rulemaking

Committee were unanimous in their

belief that the median pricing

methodology based on the 50th

percentile did not accurately reflect the

intent of lease terms. In exercising its

trust responsibility to Indian lessors,

MMS will continue to calculate the

major portion value at the 75th

percentile established in the August

1999 final rule.

Comments on Specific Issues

MMS specifically sought comment on

whether there is a valid reason for

differentiating between leases located in

other States and leases in Montana and

North Dakota when they both may be

required to use the same valuation

standards.

The tribal commenter pointed out that

under the provisions of the gas

regulations that allow other tribes and

allottees to opt out of the applicable

indexes, no time limits for audits,

adjustments, and collection are

imposed. The commenter stated that the

result is unfair and disparate treatment

for the Montana and North Dakota

tribes.

The industry commenter recognized

that the Indian lessors in Montana and

North Dakota are being treated

differently from those groups under the

index-based valuation. The commenter

offered two solutions to remedy the

situation:

• Apply the restricted time limits to

all Indian lessors; or

• Calculate major portion at the 50th

percentile.

Response. MMS concludes that there

is no valid reason for differentiating

between leases located in Montana and

North Dakota and leases located in other

States when they both may be required

to use the same valuation standards.

Further, we believe the suggestions

proffered by the industry commenter are

not in the best interests of Indian lessors

and consistent with the Secretary’s trust

responsibilities.

MMS also sought comments on

whether the time limits on adjustment

and audit could have a negative revenue

impact on royalties collected from gas

produced from Indian lands in Montana

and North Dakota.

The tribal commenter believes that

the reduced time periods place a

significant burden on tribes that

conduct their own audit program. It may

require tribes to put aside, postpone or

abandon ongoing audits of earlier

periods to meet the new deadlines. The

reduced time period may affect tribes’

abilities to do a comprehensive and

thorough audit or possibly any audit at

all within the shortened time period.

The commenter is also concerned that

MMS valuation resources may be

stretched too thin. The above factors

together may result in less revenues to

Indian lessors located in Montana and

North Dakota.

Response. MMS agrees that the timing

restrictions could hinder MMS and

tribal audit efforts.

The tribal commenter suggests that

paragraphs (2), (3) and (4) of 30 CFR

206.174 be removed as they would no

longer be necessary if paragraph (1) is

removed.

Response. This comment is a

misunderstanding caused by

typographical errors in the June 15,

2000, proposed rule (65 FR 37504)

which replaced the lowercase ‘‘L’’ with

a numerical ‘‘1’’ in many parts of the

text. MMS is removing 30 CFR

206.174(l) (i.e., lowercase ‘‘L’’) which

includes paragraphs (1)–(4). MMS

corrected these typographical errors in

the July 7, 2000, Federal Register (65 FR

42064).

III. Procedural Matters

1. Summary Cost and Benefit Data.

The objective of this rule is to remove

the special timing requirements for

adjustments and audits of royalties on

gas produced from Indian leases in

Montana and North Dakota. We have

summarized below the estimated costs

and benefits of this rule to the three

affected groups: Indian lessors in

Montana and North Dakota, industry,

and the Federal Government. The cost

and benefit information in this Item 1 of

Procedural Matters is used as the basis

for the departmental certifications in

Items 3–10.

A. Indian Lessors in Montana and North

Dakota

We estimate that in 1997, through

audits, MMS identified and collected

unpaid revenues amounting to 2 percent

of the total royalties paid for gas

production on certain Indian leases

located in Montana.

In 1999, payors submitted about

$420,000 in royalties from gas produced

from Indian leases in Montana and

$49,000 in royalties from gas produced

from Indian leases in North Dakota.

Using 2 percent to calculate the

additional audit revenues that may be

expected for the 1999 sales year, MMS

should collect an additional $8,400 from

leases in Montana and $980 from leases

in North Dakota. We conclude that if

audits cannot be completed within one

year of the royalty line adjustments

timeframes, Indian lessors could

potentially lose these uncollected

revenues, plus applicable late payment

interest, annually.

B. Industry

This rule will impose no new

reporting burdens on industry. Industry

will benefit from the final rule by being

able to make adjustments to royalty

lines beyond the current 1-year period.

However, industry will pay an

undetermined amount of additional

interest on any underpayments

discovered during audits that take

longer than 1 year to complete.

Small Business Issues. Approximately

17 entities in Montana and 5 in North

Dakota—most of which are small

businesses because they employ 500 or

less employees—pay royalties to MMS

on gas produced from Indian leases. As

discussed in A. above, these 22 entities

collectively will pay less than $10,000

in uncollected royalties annually as a

result of an extended adjustment and

audit period. The average estimated

impact would be $426 in uncollected

royalties affecting about 4 percent of the

small businesses reporting gas royalties

for Indian leases. This rule benefits

small tribes that would otherwise have

to hire additional audit staff to handle

the burden of performing both past and

present audits concurrently. From this

information, we conclude that this rule

will not have a significant economic

impact on a substantial number of small

entities.

C. Federal Government

Removing the time limits on audit

will help to ensure that Indian mineral

lessors receive the maximum revenues

from mineral resources on their land

consistent with the Secretary’s trust

responsibility and lease terms.

D. Summary of Costs and Benefits to

Affected Groups

62614 Federal Register / Vol. 65, No. 203 / Thursday, October 19, 2000 / Rules and Regulations

Description

(See corresponding narrative above)

<Cost>/Benefit Amount

First Year Subsequent Years

Indian Lessors in Montana and North Dakota ........................................ $9,380 plus interest ....................... $9,380 plus interest

Industry .................................................................................................... <$9,380 plus interest> ................... <$9,380 plus interest>

Federal Government ............................................................................... ¥0¥ .............................................. ¥0¥

2. 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 will not alter the

budgetary effects or 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.

3. The Regulatory Flexibility Act

The Department of the Interior

certifies that this rule will not have a

significant economic effect on a

substantial number of small entities

under the Regulatory Flexibility Act (5

U.S.C. 601 et seq.). See Small Business

Issues in Item 1.B. above.

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.

4. 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. Will 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. Will 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.

5. Unfunded Mandates Reform Act

This rule will not impose an

unfunded mandate on State, local, or

tribal governments or the private sector

of more than $100 million per year. The

rule will 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.

6. Takings (E.O. 12630)

Under 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.

7. Federalism (E.O. 13132)

Under Executive Order 13132, this

proposed rule does not have Federalism

implications. This rule does not

substantially or directly affect the

relationship between Federal and State

governments or impose costs on States

or localities.

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

Under Executive Order 12988, the

Office of the Solicitor has determined

that this proposed rule will not unduly

burden the judicial system and does

meet the requirements of sections 3(a)

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

9. Paperwork Reduction Act of 1995

This 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.

10. 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 in 30 CFR 206

Coal, Continental shelf, Geothermal

energy, Government contracts,

Indians—lands, Mineral royalties,

Natural gas, Petroleum, Public lands—

mineral resources, Reporting and

recordkeeping requirements.

Dated: October 10, 2000.

Sylvia V. Baca,

Assistant Secretary, Land and Minerals

Management.

For reasons stated in the preamble,

MMS amends part 206 as follows:

PART 206—PRODUCT VALUATION

1. The authority citation for part 206

continues to read as follows:

Authority: 5 U.S.C. 301 et seq.; 25 U.S.C.

396 et seq., 396a et seq., 2101 et seq.; 30

U.S.C. 181 et seq., 351 et seq., 1001 et seq.,

1701 et seq.; 31 U.S.C. 9701; 43 U.S.C. 1301

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

§ 206.174 [Amended]

2. In § 206.174, remove paragraph (l).

[FR Doc. 00–26932 Filed 10–18–00; 8:45 am]

BILLING CODE 4310–MR–P

DEPARTMENT OF DEFENSE

Department of the Navy

32 CFR Part 706

Certifications and Exemptions Under

the International Regulations for

Preventing Collisions at Sea, 1972

AGENCY: Department of the Navy, DOD.

ACTION: Final rule.

SUMMARY: The Department of the Navy

is amending its certifications and

exemptions under the International

Regulations for Preventing Collisions at

Sea, 1972 (72 COLREGS), to reflect that

the Deputy Assistant Judge Advocate

General of the Navy (Admiralty and

Maritime Law) has determined that USS

Mitscher (DDG 57) is a vessel of the

Navy which, due to its special

construction and purpose, cannot fully

comply with certain provisions of the 72

COLREGS without interfering with its

special function as a naval ship. The

intended effect of this rule is to warn

mariners in waters where 72 COLREGS

apply.