Federal Register / Vol. 66, No. 5 / Monday, January 8, 2001 / Proposed Rules 1277

result in any 1-year expenditure that

would exceed $100 million adjusted for

inflation. The current inflation-adjusted

statutory threshold is $110 million.

V. Federalism

FDA has analyzed this proposed rule

in accordance with the principles set

forth in Executive Order 13132. FDA

has determined that the proposed rule

does not contain policies that have

substantial direct effects 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. Accordingly, the

agency has concluded that the proposed

rule does not contain policies that have

federalism implications as defined in

the order and, consequently, a

federalism summary impact statement is

not required.

VI. Paperwork Reduction Act of 1995

FDA tentatively concludes that this

proposed rule contains no collections of

information. Therefore, clearance by the

Office of Management and Budget under

the Paperwork Reduction Act of 1995 is

not required.

VII. Request for Comments

Interested persons may submit to the

Dockets Management Branch (address

above) written comments regarding this

proposal by March 26, 2001. This

comment period runs concurrently with

the comment period for the direct final

rule; any comments received will be

considered as comments regarding the

direct final rule. Two copies of any

comments are to be submitted, except

that individuals may submit one copy.

Comments are to be identified with the

docket number found in brackets in the

heading of this document. Received

comments may be seen in the Dockets

Management Branch between 9 a.m. and

4 p.m., Monday through Friday. In the

event the direct final rule is withdrawn,

all comments received will be

considered comments on this proposed

rule.

List of Subjects in 21 CFR Part 14

Administrative practice and

procedure, Advisory committees, Color

additives, Drugs, Radiation protection.

Therefore, under the Federal Food,

Drug, and Cosmetic Act and under

authority delegated to the Commissioner

of Food and Drugs, it is proposed that

21 CFR part 14 be amended to read as

follows:

PART 14—PUBLIC HEARING BEFORE

A PUBLIC ADVISORY COMMITTEE

1. The authority citation for 21 CFR

part 14 is revised to read as follows:

Authority: 5 U.S.C. App. 2; 15 U.S.C.

1451–1461; 21 U.S.C. 41–50, 141–149, 321–

394, 467f, 679, 821, 1034; 28 U.S.C. 2112; 42

U.S.C. 201, 262, 263b, 264.

2. Section 14.75 is amended by

revising paragraph (a)(1) to read as

follows:

§ 14.75 Examination of administrative

record and other advisory committee

records.

(a) * * *

(1) The written information for

consideration by the committee at any

meeting: Whenever practicable, before

or at the time of the meeting.

* * * * *

Dated: December 29, 2000.

Margaret M. Dotzel,

Associate Commissioner for Policy.

[FR Doc. 01–390 Filed 1–5–01; 8:45 am]

BILLING CODE 4160–01–F

DEPARTMENT OF THE INTERIOR

Minerals Management Service

30 CFR Part 256

RIN 1010–AC–68

Revision of Requirements Governing

Surety Bonds for Outer Continental

Shelf Leases.

AGENCY: Minerals Management Service

(MMS), Interior.

ACTION: Proposed rule.

SUMMARY: The MMS is proposing to

modify requirements governing surety

bonds for activities on the Outer

Continental Shelf (OCS). These changes

will codify the terms and conditions

under which a surety will be relieved of

responsibility when MMS terminates

the period of liability of a bond.

Codifying these terms and conditions is

necessary to clarify the responsibilities

of the lessee and the surety after the

lease expires.

DATES: We will consider all comments

we receive by March 9, 2001. We will

begin reviewing comments then and

may not fully consider comments we

receive after March 9, 2001.

ADDRESSES: If you wish to comment,

you may submit your comments by any

one of several methods. You may mail

or hand-carry comments (three copies)

to the Department of the Interior;

Minerals Management Service; Mail

Stop 4024; 381 Elden Street; Herndon,

Virginia 20170–4817; Attention: Rules

Processing Team (RPT). You may also

send your comments by e-mail or e-mail

attachment. The RPT’s e-mail address is:

rules.comments@mms.gov.

FOR FURTHER INFORMATION CONTACT: John

Mirabella, Engineering and Operations

Division, (703) 787–1607.

SUPPLEMENTARY INFORMATION: OCS

lessees must comply with regulations

governing operations, payments of rents

and royalties, and end-of-lease

obligations. To ensure that the lessee

will be financially able to meet all

requirements, including end-of-lease

requirements, MMS requires the lessee

to post a bond. This rule would amend

the provisions of 30 CFR 256.58

concerning the cancellation of a bond.

When the lessee has met all end-oflease obligations, MMS terminates the

liability period of the bond. This

amendment addresses situations when

the lessee appears to meet all end-oflease requirements and we later

discover that obligations still exist. For

example, an audit may reveal that the

lessee owes us additional royalty. As

another example, a plugged well may

start to leak. In either case, the lessee

must correct the problem.

In the case of royalties, the liability

would be discovered when the audit is

conducted after the end of the surety’s

liability period. By statute, any demand

for performance of a monetary

obligation must be made within 7 years.

In the example of the leaking well, there

is not a stipulated time period. Problems

associated with plugged wells in the

OCS are rare; when they do occur, they

are generally discovered within a few

years of the plugging activity.

Should the lessee fail to perform a

lease obligation, MMS turns to the

surety for performance. This rule

addresses how long a bond will be held

before cancellation to assure availability

to cover a problem that is discovered

after the liability period on a bond has

ended. The current regulation does not

set a limit on the period that MMS may

continue to hold the bond company

responsible for a problem that occurs

during the liability period.

OCS wells rarely start to leak

following plugging operations.

Therefore, we have difficulty predicting

when a leak might occur. This notice

proposes a period of 7 years (plus such

additional time taken for appeals or

litigation) during which MMS may hold

the bond for claims based upon

obligations that accrued during the

period of liability. During this period,

we will retain security or collateral

pledged to MMS in lieu of a surety. The

bond will be canceled after 7 years and

1278 Federal Register / Vol. 66, No. 5 / Monday, January 8, 2001 / Proposed Rules

any other forms of security will be

returned. We believe that a 7-year

period will provide adequate protection

to the Government and will provide a

measure of certainty to bond companies.

The 7-year provision applies to all

base bonds, unless we find that less

security needs to be retained. The rule

would release supplemental bond

providers, upon completion of the

bonded work, from liability for

obligations that accrued before

acceptance of the reclamation work,

unless we find that potential liability is

greater than the amount of the base

bond. We will normally release the

supplemental bond upon completion of

the bonded work because in most cases,

we anticipate that the general bond will

be sufficient to cover our estimate of

potential residual liabilities.

The proposal would not change the

provision in 30 CFR 256.58(c) that

allows MMS to reinstate your bond.

That provision allows us to reinstate

your bond as if no cancellation or

release had occurred if:

(1) You make a payment under the

lease and the payment is rescinded or

must be repaid by the recipient because

you are insolvent, bankrupt, subject to

reorganization, or placed in

receivership; or

(2) You represent to us that you have

discharged your obligations under the

lease and your representation was

materially false.

Procedural Matters

Public Comment Procedure: Our

practice is to make comments, including

names and home addresses of

respondents, available for public review

during regular business hours.

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 may be circumstances in which

we would withhold from the

rulemaking record a respondent’s

identity, to the extent allowable by law.

If you wish us to withhold your name

and/or address, you must state this

prominently at the beginning of your

comment. 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.

Regulatory Planning and Review

(Executive Order 12866)

This document is not a significant

rule and is not subject to review by the

Office of Management and Budget

(OMB) 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.

This rule, in many important ways,

follows aspects of current policy

included in the bond form. The rule will

also extend that policy to other forms of

security such as escrow accounts which

are not currently used for base bonds.

Since this rule normally will not apply

to supplemental bonds without specific

action by the Regional Supervisor, the

impact of this change is minimal.

(2) This rule will not create a serious

inconsistency or otherwise interfere

with an action taken or planned by

another agency. Other agencies are not

affected by the bonds and other forms of

surety that protect the government’s

interests.

(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. This

rule will have no effect on the rights of

the recipients of entitlements, grants,

user fees, or loan programs.

(4) This rule does not raise novel legal

or policy issues. The rule more clearly

conforms MMS practice to that of the

private sector and provides certainty

with respect to the cancellation of

surety bonds and other lease security.

Regulatory Flexibility (RF) Act

The Department certifies that this rule

will not have a significant economic

effect on a substantial number of small

entities under the RF Act (5 U.S.C. 601

et seq.).

This rule will affect lessees and

operators of leases on the OCS. This

includes about 130 different companies.

These companies are generally

classified under the North American

Industry Classification System (NAICS)

code 211111, Crude Petroleum and

Natural Gas Extraction, which includes

companies that extract crude petroleum

and natural gas. For this NAICS code, a

small company is one with fewer than

500 employees. Based on these criteria,

we estimate that about 54 percent of the

companies are considered small. This

rule, therefore, affects a substantial

number of small entities.

The companies that are considered

small have an average of about 15

offshore facilities. We estimate that

these small companies have annual

sales between $1 million and $380

million.

As discussed in the Regulatory

Planning and Review section, we expect

this rule to have only minimal effects

and, accordingly, we do not expect this

rule to have a significant effect on any

company, large or small. Under current

regulations, when a lessee meets all of

the lease requirements, the period of

liability ends. If MMS later discovers a

problem with the way the work was

performed, we will hold the lessee

responsible. If the lessee is not able to

meet the obligation, we hold the bond

company responsible. This regulation

establishes a time period during which

MMS will hold the bond before

cancellation. The codification of a

policy on bond cancellation is new. The

other change for current practice is that

MMS retains pledged securities for the

same length of time we have been

waiting before canceling surety bonds.

While this new provision is needed to

ensure consistency of agency practice,

the provision will not have a significant

effect since companies currently do not

use instruments other than surety bonds

to meet the basic bond requirement.

This rule will also affect companies

that sell surety bonds or provide other

types of security to OCS lessees. For

those companies, this rule will provide

certainty with regard to residual

liabilities. Since the provisions in this

rule are generally the same as current

practice, any effects on bonding

companies will be minor. Those minor

effects will be reflected in costs charged

to oil and gas lessees and will ultimately

be borne by oil and gas lessees. These

effects are included in the estimates

addressing the oil and gas lessees. Your

comments are important. The Small

Business and Agriculture Regulatory

Enforcement Ombudsman and 10

Regional Fairness Boards were

established to receive comments from

small business 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 of MMS, call toll-free (888) 734–

3247.

Paperwork Reduction Act (PRA) of

1995

The information collection aspects of

this rule remain unchanged. The

proposed revisions contain no

additional information collection or

recordkeeping requirements, and a

submission to OMB under the PRA is

not required. The OMB has approved

the information collection requirements

in the current regulations and assigned

OMB control number 1010–0006, with a

Federal Register / Vol. 66, No. 5 / Monday, January 8, 2001 / Proposed Rules 1279

current expiration date of March 31,

2000.

Federalism (Executive Order 13132)

With respect to Executive Order

13132, the rule does not have

Federalism implications. This rule does

not substantially and directly affect the

relationship between the Federal and

State governments. The bonding

program is between the Federal

Government and the lessees of Federal

leases. The bond does not affect

obligations between the lessee and any

State or local government. This rule

does not impose costs on States or

localities. State or local governments do

not provide bonds and do not need to

comply with bonding requirements.

Takings (Executive Order 12630)

With respect to Executive Order

12630, the proposed rule does not have

significant Takings implications. A

Takings Implication Assessment is not

required. The proposed rulemaking is

not a governmental action capable of

interfering with constitutionally

protected property rights.

Civil Justice Reform (Executive Order

12988)

With respect to 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 Executive Order.

National Environmental Policy Act

(NEPA) of 1969

This rule does not constitute a major

Federal action significantly affecting the

quality of the human environment. A

detailed statement under the NEPA is

not required.

Small Business Regulatory Enforcement

Fairness Act (SBREFA)

This rule is not a major rule under (5

U.S.C. 804(2)) the SBREFA. 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.

We do not expect this rule to have a

significant effect because, as discussed

earlier, this rule would, generally,

codify policies already in use. The

substantive change for securities other

than surety bonds will not have a

significant effect because the rule

applies to the general bond requirement,

and surety bonds are used by almost all

MMS lessees to satisfy the base bond

requirement.

Unfunded Mandate Reform Act

(UMRA) of 1995 (Executive Order

12866)

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 UMRA (2 U.S.C. 1531 et

seq.) is not required. This is because the

rule does not affect State, local, or tribal

governments, and the effect on the

private sector is small.

List of Subjects in 30 CFR Part 256

Administrative practice and

procedure, Continental shelf,

Government contracts, Oil and gas

exploration, Public lands—mineral

resources, Reporting and recordkeeping

requirements, Surety bonds.

Dated: December 20, 2000.

Sylvia V. Baca,

Assistant Secretary, Land and Minerals

Management.

For the reasons stated in the

preamble, the Minerals Management

Service (MMS) proposes to amend 30

CFR part 256 as follows:

1. The authority citation for part 256

continues to read as follows:

Authority: 43 U.S.C. 1331 et seq.; 42 U.S.C.

6213.

2. Section 256.58 is revised to read as

follows:

§ 256.58 Termination of the period of

liability and cancellation of a bond.

This section defines the terms and

conditions under which MMS will

terminate the period of liability of a

bond or cancel a bond. Terminating the

period of liability of a bond ends the

period during which obligations

continue to accrue but does not relieve

the surety of the responsibility for

obligations that accrued during the

period of liability. Canceling a bond

relieves the surety of all liability.

(a) When the surety under your bond

requests termination:

(1) The Regional Director will

terminate the period of liability under

your bond within 90 days after MMS

receives the request; and

(2) If you intend to continue

operations, or have not completed

abandonment, you must provide a

replacement bond of an equivalent

amount.

(b) If, following the termination of the

period of liability of a bond, you

provide a replacement bond according

to this paragraph, the Regional Director

will cancel your terminated bond and

the surety that provided your

terminated bond will not retain any

liability. The Regional Director will

cancel your bond if:

(1) The surety issuing the new bond

agrees to assume all outstanding

liabilities that accrued during the period

of liability that was terminated; and

(2) The new bond is equal to or

greater than the bond that is to be

canceled.

(c) If the period of liability is

terminated for a bond but the bond is

not replaced by a bond of an equivalent

amount, the surety that provided your

terminated bond will continue to be

responsible for accrued obligations until

the obligations are satisfied and for

additional periods of time according to

paragraph (d) of this section.

(d) At the time your lease expires or

is terminated, the surety or sureties that

issued the bond(s) covering accrued

obligations will continue to be

responsible, and the Regional Director

will retain other forms of security for

the period of time and under the terms

shown in the following table:

For the type of bond below The period of liability will end Your bond will be cancelled

(1) Base Bonds submitted under

§ 256.52(a), § 256.53(a), or (b).

When the Regional Director determines that you have met all of

your obligations under the lease.

Seven years after the completion of all bonded obligations, or at the

conclusion of any appeals or litigation related to your bonded obligations, whichever is later. The Regional Director may:

(i) determine that you need less than the full amount of the base

bond to meet any possible future problems; and

(ii) reduce the amount of your bond or return a portion of your security.

1280 Federal Register / Vol. 66, No. 5 / Monday, January 8, 2001 / Proposed Rules

For the type of bond below The period of liability will end Your bond will be cancelled

(2) Supplemental bonds submitted

under § 256.53(d).

When the Regional Director determines that you have met all

your obligations covered by the

supplemental bond.

When you meet your bonded obligations, unless the Regional Director:

(i) determines that the future potential liability resulting from any undetected problems is greater than the amount of the base bond;

and

(ii) notifies the provider of the bond that the Regional Director will

wait up to 7 years before canceling all or a part of the bond (or

longer period as necessary to complete any appeals or judicial litigation related to your bonded obligations).

(e) For all bonds, the Regional

Director may reinstate your bond as if

no cancellation or release had occurred

if:

(1) A person makes a payment under

the lease and the payment is rescinded

or must be repaid by the recipient

because the person making the payment

is insolvent, bankrupt, subject to

reorganization, or placed in

receivership; or

(2) The responsible party represents to

MMS that it has discharged its

obligations under the lease, and the

representation was materially false

when the bond was canceled or

released.

[FR Doc. 01–120 Filed 1–5–01; 8:45 am]

BILLING CODE 4310–MR–P

DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 326

National Reconnaissance Office

Privacy Act Program

AGENCY: National Reconnaissance

Office, DOD.

ACTION: Proposed rule.

SUMMARY: The National Reconnaissance

Office (NRO) is proposing to exempt one

Privacy Act systems of records. The

system of records is QNRO–23,

Counterintelligence Issue Files. The

exemptions are intended to increase the

value of the systems of records for law

enforcement purposes, to comply with

prohibitions against the disclosure of

certain kinds of information, and to

protect the privacy of individuals

identified in the systems of records.

DATES: Comments must be received by

March 9, 2001 to be considered by the

agency.

ADDRESSES: National Reconnaissance

Office, Information Access and Release

Center, 14675 Lee Road, Chantilly, VA

20151–1715.

FOR FURTHER INFORMATION CONTACT: Ms.

Barbara Freimann at (703) 808–5029.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

It has been determined that this

Privacy Act rule for the Department of

Defense does not constitute ‘‘significant

regulatory action’’. Analysis of the rule

indicates that it does not have an annual

effect on the economy of $100 million

or more; does not create a serious

inconsistency or otherwise interfere

with an action taken or planned by

another agency; does not materially alter

the budgetary impact of entitlements,

grants, user fees, or loan programs or the

rights and obligations of recipients

thereof; does not raise novel legal or

policy issues arising out of legal

mandates, the President’s priorities, or

the principles set forth in Executive

Order 12866.

Regulatory Flexibility Act

It has been determined that this

Privacy Act rule for the Department of

Defense does not have significant

economic impact on a substantial

number of small entities because it is

concerned only with the administration

of Privacy Act systems of records within

the Department of Defense.

Paperwork Reduction Act

It has been determined that this

Privacy Act rule for the Department of

Defense imposes no information

requirements beyond the Department of

Defense and that the information

collected within the Department of

Defense is necessary and consistent

with 5 U.S.C. 552a, known as the

Privacy Act, and 44 U.S.C. Chapter 35.

List of Subjects in 32 CFR Part 326

Privacy.

1. The authority citation for 32 CFR

part 326 continues to read as follows:

Authority: Pub. L. 93–579, 88 Stat 1896 (5

U.S.C. 552a).

2. Section 326.17 is proposed to be

amended by adding paragraphs (e) as

follows:

§ 326.17 Exemptions.

* * * * *

(e) QNRO–23

(1) System name: Counterintelligence

Issue Files.

(2) Exemptions: (i) Investigatory

material compiled for law enforcement

purposes may be exempt pursuant to 5

U.S.C. 552a(k)(2). However, if an

individual is denied any right, privilege,

or benefit for which he would otherwise

be entitled by Federal law or for which

he would otherwise be eligible, as a

result of the maintenance of such

information, the individual will be

provided access to such information

except to the extent that disclosure

would reveal the identity of a

confidential source.

(ii) Investigatory material compiled

solely for the purpose of determining

suitability, eligibility, or qualifications

for federal civilian employment,

military service, federal contracts, or

access to classified information may be

exempt pursuant to 5 U.S.C. 552a(k)(5),

but only to the extent that such material

would reveal the identity of a

confidential source.

(iii) Therefore, portions of this system

of records may be exempt pursuant to 5

U.S.C. 552a(k)(2) and/or (k)(5) from the

following subsections of 5 U.S.C.

552a(c)(3), (d), (e)(1), (e)(4)(G), (H) and

(I), and (f).

(3) Authority: 5 U.S.C. 552a(k)(2) and

(k)(5).

(4) Reasons: (i) From subsection (c)(3)

because to grant access to the

accounting for each disclosure as

required by the Privacy Act, including

the date, nature, and purpose of each

disclosure and the identity of the

recipient, could alert the subject to the

existence of the investigation or

prosecutable interest by NRO or other

agencies. This could seriously

compromise case preparation by

prematurely revealing its existence and

nature; compromise or interfere with

witnesses or make witnesses reluctant to

cooperate; and lead to suppression,

alteration, or destruction of evidence.