Federal Register / Vol. 75, No. 109 / Tuesday, June 8, 2010 / Proposed Rules 32343 

DEPARTMENT OF THE INTERIOR 

Minerals Management Service 

30 CFR Part 218 

[Docket No. MMS–2009–MRM–0005] 

RIN 1010–AD36 

Debt Collection and Administrative 

Offset for Monies Due the Federal 

Government 

AGENCY: Minerals Management Service 

(MMS), Interior. 

ACTION: Proposed rule. 

SUMMARY: The MMS is proposing to 

promulgate regulations establishing 

procedures to implement the provisions 

governing collection of delinquent 

royalties, rentals, bonuses, and other 

amounts due under leases and other 

agreements for the production of oil, 

natural gas, coal, geothermal energy, 

other minerals, and renewable energy 

from Federal lands onshore, Indian 

tribal and allotted lands, and the Outer 

Continental Shelf. The proposed 

regulations would include provisions 

for administrative offset and would 

clarify and codify the provisions of the 

Debt Collection Act of 1982 (DCA) and 

the Debt Collection Improvement Act of 

1996 (DCIA). 

DATES: Comments must be submitted on 

or before August 9, 2010. 

ADDRESSES: You may submit comments 

on the rulemaking by any of the 

following methods. Please use the 

Regulation Identifier Number (RIN) 

1010–AD36 as an identifier in your 

message. See also Public Availability of 

Comments under Procedural Matters. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. In the entry titled 

‘‘Enter Keyword or ID,’’ enter MMS2009-MRM-0005, then click search. 

Follow the instructions to submit public 

comments and view supporting and 

related materials available for this 

rulemaking. The MMS will post all 

comments. 

• Mail comments to Hyla Hurst, 

Regulatory Specialist, Minerals 

Management Service, Minerals Revenue 

Management, P.O. Box 25165, MS 

61013B, Denver, Colorado 80225. 

• Hand-carry comments or use an 

overnight courier service. Our courier 

address is Building 85, Room A–614, 

Denver Federal Center, West 6th Ave. 

and Kipling St., Denver, Colorado 

80225. 

FOR FURTHER INFORMATION CONTACT: For 

comments or questions on procedural 

issues, contact Hyla Hurst, Regulatory 

Specialist, Minerals Revenue 

Management (MRM), MMS, telephone 

(303) 231–3495. For questions on 

technical issues, contact Sarah 

Inderbitzin, Office of Enforcement, 

MRM, MMS, telephone (303) 231–3748. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The MMS is responsible for the 

collection, accounting, and 

disbursement of billions of dollars per 

year in bonus, rental, royalty, and other 

revenues derived from leases and other 

agreements for the production of oil, 

natural gas, coal, geothermal energy, 

other minerals, and renewable energy 

from Federal lands onshore, Indian 

tribal and allotted lands, and the Outer 

Continental Shelf (OCS). The MMS also 

is responsible for enforcement of royalty 

and other payment obligations under 

applicable statutes, regulations, leases, 

agreements, and contracts. 

The MMS undertakes current debt 

collection activities under the DCA 

(Pub. L. 97–365), as amended by the 

DCIA (Pub. L. 104–134), (codified at 31 

U.S.C. 3711, 3716–18, and 3720A). The 

DCIA was enacted primarily to increase 

collection of nontax debts owed to the 

Federal Government. Among other 

provisions, the DCIA centralized the 

administrative collection of most 

delinquent nontax debt at the U.S. 

Department of the Treasury’s Financial 

Management Service to increase the 

efficiency of collection efforts. 

Government agencies are now required 

to transfer nontax debt that has been 

delinquent for 180 days or less to 

Treasury for further collection action, 

including administrative offset. 

This proposed rule is intended to 

implement statutory provisions of the 

DCA and DCIA, and to adopt the 

Government-wide debt collection 

standards promulgated by the 

Departments of the Treasury and Justice, 

known as the Federal Claims Collection 

Standards (FCCS) (31 CFR parts 900– 

904). This proposed rule would 

supplement the FCCS by prescribing 

procedures necessary and appropriate 

for MMS operations. The DCIA grants 

MMS discretionary authority in many 

aspects of debt collection, and this 

proposed rule would define the 

parameters of this authority. 

Under current debt collection 

practice: 

• For Federal and Indian delinquent 

debts and civil penalty notices, MMS 

sends a written notice to debtors either 

(1) With an invoice; (2) after the due 

date of an invoice; or (3) after the receipt 

date of an unpaid Form MMS–2014, 

Report of Sales and Royalty Remittance 

(OMB Control Number 1010–0140). 

• For Federal oil and gas leases, if 

MMS sends a written notice to the 

payor, then MMS also sends written 

notice to the lessees and operating rights 

owners. 

The MMS allows the debtor 60 days 

from the date of the written notification 

to either pay the debt or enter into a 

payment agreement with MMS. A 

debtor may also appeal the debt to MMS 

under 30 CFR part 290 or part 241. If the 

debtor fails to take one of these actions, 

MMS refers the delinquent debt to 

Treasury within 180 days of when the 

debt became delinquent. 

II. Explanation of Proposed 

Amendments 

Before reading the explanatory 

information below, please turn to the 

proposed rule language, which 

immediately follows the List of Subjects 

in 30 CFR part 218 and signature page 

in this proposed rule. This language will 

be codified in the Code of Federal 

Regulations (CFR) if this rule is 

finalized as written. 

After you have read the proposed rule 

language, please return to the preamble 

discussion below. The preamble 

contains additional information about 

the proposed rule, such as why we 

defined a term in a certain manner, why 

we chose a certain procedure, and how 

we interpret the laws this rule 

implements. 

We are proposing to add a new 

subpart to codify and enhance current 

MMS debt collection practices. The new 

subpart is proposed at 30 CFR part 218, 

subpart J—Debt Collection and 

Administrative Offset. Following is a 

section-by-section explanation of the 

new subpart (omitting sections that 

require no further explanation): 

A. 30 CFR 218.700 What definitions 

apply to the regulations in this subpart? 

Subsection (a) would define 

‘‘administrative offset’’ in a manner 

essentially identical to its definition in 

the DCIA (31 U.S.C. 3701(a)(1)). 

Subsection (b) would define ‘‘agency’’ 

in a manner essentially identical to its 

definition in the DCIA (31 U.S.C. 

3701(a)(4)). 

Subsection (e) would clarify that 

‘‘day’’ means a calendar day. The MMS 

further clarifies that, in determining the 

ending date for a particular period of 

time, the last day of the period must be 

counted unless it is a Saturday, Sunday, 

or Federal holiday. 

Subsection (f) would define ‘‘debt’’ 

and ‘‘claim’’ in a manner similar to the 

definition in the DCIA (31 U.S.C. 

3701(b)). However, subsection (f) omits 

the examples of types of debts or claims 

included in 31 U.S.C. 3701(b) as 


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32344 Federal Register / Vol. 75, No. 109 / Tuesday, June 8, 2010 / Proposed Rules 

unnecessary and potentially confusing. 

It is our intention that ‘‘debt’’ and 

‘‘claim’’ be read synonymously and 

broadly to encompass any and all 

amounts that are determined to be due 

the United States from any entity, other 

than a Federal Agency. For example, 

‘‘debt’’ or ‘‘claim’’ would include, but is 

not limited to, royalties and other lease 

revenues and monies due under (1) A 

royalty-in-kind purchase agreement; (2) 

a Bureau of Land Management (BLM) 

storage agreement; or (3) a Department 

of Interior (DOI) contract, agreement, 

license, easement, permit, or right-ofway. With two changes, subsection (f) 

essentially would adopt verbatim the 31 

U.S.C. 3701(b)(2) definition of ‘‘debt’’ or 

‘‘claim’’ in relation to administrative 

offsets. The word ‘‘money’’ would be 

included in subsection (f) to ensure that 

the scope of definition of ‘‘debt’’ and 

‘‘claim’’ is not inadvertently limited by 

31 U.S.C. 3701(b)(2)’s reference only to 

‘‘funds or property.’’ The phrase ‘‘by a 

person’’ would be struck from this 

portion of subsection (f) because it is 

redundant and potentially limiting to 

the first sentence of subsection (f). 

Subsection (g) would broadly define 

‘‘debtor.’’ Thus, subsection (g) would 

encompass not only lessees and payors, 

but also any entity covered by the 

definition of ‘‘person’’ in subsection (s), 

and any contractor or other entity that 

owes a debt to the Department related 

to Federal or Indian energy or mineral 

resources. 

Subsection (n) would define ‘‘legally 

enforceable’’ to mean that there has been 

a final agency determination that the 

debt, in the amount stated, is due, and 

there are no legal bars to collection by 

offset consistent with the definition at 

31 CFR 285.5. A final agency 

determination may include, but is not 

limited to, a bill, order, MMS Director’s 

decision, or Interior Board of Land 

Appeals decision that you neither pay 

nor appeal. 

Subsection (o) would broadly define 

‘‘lessee’’ to cover any record title holder, 

assignee, operating rights owner, or any 

other person or entity who holds an 

interest in a lease, easement, right-ofway, contract, or other agreement, 

regardless of form, for the development 

or use of Federal or Indian minerals or 

other resources for which MMS collects 

monies or other compensation. The 

definition in subsection (o) is broader 

than the definition of ‘‘lessee’’ in 30 CFR 

part 206 because it is intended to apply 

to holders of leases and other contracts 

and agreements for any type of Federal 

and Indian minerals and resources. 

Subsection (r) would include ‘‘payors’’ 

within the scope of debtors subject to 

this rulemaking. Therefore, subsection 

(r) would define a ‘‘payor’’ as a person 

responsible for payment obligations on 

all Indian mineral leases, as well as 

Federal solid and geothermal leases, 

regardless of whether the payor is also 

a lessee. 

Subsection (s) would broadly define 

‘‘person’’ as, effectively, any person or 

entity of any kind that owes a debt to 

the United States, other than the United 

States. 

Subsection (t) would define ‘‘tax 

refund offset.’’ The DCA authorizes this 

type of offset under 31 U.S.C. 3720A. 

Section 3720A allows an agency to 

notify Treasury of certain delinquent 

debts and have the amount of the debt 

withheld from any tax refund to which 

the debtor would otherwise be entitled. 

B. 30 CFR 218.701 What is MMS’s 

authority to issue these regulations? 

Subsection (a) would identify and cite 

the statutory and regulatory authority 

for this proposed regulation. 

Subsection (b) would specifically 

adopt the FCCS and would clarify that 

this proposed regulation supplements 

the FCCS. Supplementation is necessary 

to adapt portions of the FCCS to better 

meet the needs of MMS, to comply with 

certain provisions of the FCCS requiring 

agency-specific regulation (i.e., 31 CFR 

901.9(h)), and to exercise certain 

discretionary authorities granted MMS 

by the DCIA and FCCS. To the degree 

that a matter is addressed in both the 

FCCS and this proposed regulation, we 

will follow this proposed regulation in 

lieu of the FCCS parallel provision. 

C. 30 CFR 218.702 What happens to 

delinquent debts a debtor owes MMS? 

Subsection (a) specifies that MMS 

would follow the procedures contained 

in this proposed regulation in its debt 

collection activities. Subsection (a) is 

not intended to imply that the proposed 

rule would be the sole source of debt 

collection procedures available to MMS. 

As noted above and in proposed section 

218.701(b), MMS adopts the provisions 

of the FCCS and is governed by the 

FCCS collection standards to the extent 

that one of those standards is not 

specifically addressed in this proposed 

regulation. 

Subsection (b) would implement 31 

U.S.C. 3711(g)(1), which requires 

Federal agencies to transfer nontax 

delinquent debt to Treasury within 180 

days of when the debt becomes 

delinquent. This would allow Treasury 

to take appropriate action to collect the 

debt or terminate the collection action 

in accordance with 5 U.S.C. 5514, 26 

U.S.C. 6402, 31 U.S.C. 3711 and 3716, 

the FCCS, 5 CFR 550.1108, and 31 CFR 

part 285. 

Transferring debts to Treasury 

advances the statutory goal of the DCIA 

to centralize the administrative 

collection of nontax debt with 

Treasury’s Financial Management 

Service. This centralization allows us to 

focus our efforts on collecting more 

recent debt and on working with willing 

debtors to reach agreements to repay 

their debts. It also ensures consistent 

application of debt collection 

procedures regardless of which Federal 

Agency is owed the debt. 

D. 30 CFR 218.703 What notice will 

MMS give to a debtor of our intent to 

collect a debt? 

Subsection (a) would implement 31 

U.S.C. 3716(a), under which an agency 

must give notice to the debtor of certain 

matters before collecting a claim by 

administrative offset. Subsection (a) 

would explain that we will (1) Provide 

notice to a debtor of the type and 

amount of the claim, the methods of 

offset we may employ, and the 

availability of opportunities for the 

debtor to inspect and copy records 

related to the debt; (2) obtain internal 

agency review of our decision regarding 

the debt; and (3) describe how the 

debtor may request to enter into a 

written agreement with MMS to repay 

the debt. 

Subsection (a) also would explain that 

the notice we send the debtor will 

include (1) our policy concerning the 

interest, penalty charges, and 

administrative costs MMS may assess 

against the debtor; and (2) the date by 

which the debtor must pay the debt to 

avoid added late charges and enforced 

collection activities. In addition, 

subsection (a) would explain that the 

notice MMS gives the debtor will 

provide contact information for the 

appropriate MMS employee or office for 

the debtor to contact regarding the debt. 

It is our intent to provide the debtor 

with notice of these additional factors to 

ensure the debtor is fully informed of 

the financial consequences of continued 

failure to pay. It is further intended that, 

by providing the debtor with contact 

information for the appropriate 

personnel and office, the debtor will be 

encouraged to work with us voluntarily 

to pay the debt, and thus to lessen the 

need to refer debt to Treasury for 

administrative offset and additional 

collection activities. 

Subsection (b) would clarify that 

218.703(a)(8) does not allow a debtor to 

reopen matters pertaining to orders and 

demands, notices of violations, or civil 

penalties, which are subject to MMS 

appeals regulations at 30 CFR part 290 

or part 241. The procedures under part 

290 and part 241, and the 


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complementary procedures specified in 

43 CFR part 4, establish a 

comprehensive system by which certain 

MMS decisions may be appealed to the 

MMS Director, Interior Board of Land 

Appeals, or Office of Hearings and 

Appeals Hearings Division. This system 

includes time limits for filing an appeal 

and an explanation of when a party has 

exhausted its administrative remedies. 

These provisions are essential to 

establishing when an MMS decision 

becomes final and determining the legal 

rights of both MMS and the entity that 

is the subject of our decision. By 

including subsection (b), we ensure part 

290 and part 241, and the important 

purposes they serve, are not 

circumvented by an appeal of an MMS 

decision on debt. 

E. 30 CFR 218.704 What is MMS’s 

policy on interest, penalty charges, and 

administrative costs? 

Subsection (a)(1) would ensure 

conformance with 31 U.S.C. 3717(a)(1) 

and 31 CFR 901.9(a), both of which 

require Federal agencies to charge 

interest on all outstanding debts owed 

to the United States. 

Subsection (a)(2) would clarify 31 

CFR 901.9(b)(1), which specifies that 

‘‘[i]nterest shall accrue from the date of 

delinquency, or as otherwise specified 

by law.’’ We are specifying that interest 

begins to accrue from the date that the 

debt becomes delinquent unless 

otherwise specified by law or lease 

terms. Our intent in including this 

language is to assure that we comply 

with the unique requirements of law, 

such as the interest provisions of the 

Royalty Simplification and Fairness Act 

(RSFA), which states that a royalty 

obligation on Federal oil and gas leases 

becomes due the end of the month after 

the month of production (30 U.S.C. 

1724(c)(2)). In such instances, although 

the principal royalties may be due 60 

days after the order is issued, interest 

would accrue from the end of the month 

following the month of production until 

the debt is paid, not from 60 days after 

the order until the debt was paid. The 

same holds true for all mineral leases, 

which may have unique interest 

requirements that would dictate when 

interest begins to accrue. 

Subsection (a)(3) specifies that MMS 

would use the interest and late payment 

charge calculation and other provisions 

contained in 30 CFR 218.54 and 218.102 

to assess interest due on debts involving 

Federal and Indian oil and gas leases. 

However, the rule would provide that 

this is the case unless otherwise 

specified by lease terms because some 

non-standard mineral leases have 

unique interest requirements. In such 

cases, the lease terms regarding interest 

would apply. 

Subsection (a)(4) explains that MMS 

would apply the interest provisions for 

Federal and Indian solid mineral 

(including coal) and geothermal leases 

found in 30 CFR 218.202 and 218.302. 

Subsection (b) explains that MMS 

would assess a penalty of 6 percent on 

any delinquent debt that is more than 90 

days from the date of delinquency that 

it refers to Treasury consistent with the 

DCIA (31 U.S.C. 3717(e)(2)) and FCCS 

(31 CFR 901.9(d)). The penalty would 

accrue from the date of delinquency 

through the date MMS refers the debt to 

Treasury. It is important to note that 

penalties and interest will continue to 

accrue on any debt referred to Treasury. 

However, Treasury will assess and 

collect those amounts. 

The penalty would accrue not only on 

the delinquent debt, but also on any 

interest accrued through the date of 

referral and on the $436 in 

administrative costs we would assess 

under paragraph (c) of this section 

explained below. For example, assume 

you receive an order to pay $1,000 in 

additional royalties due on Federal oil 

and gas leases, and the order gives you 

60 days to pay the bill (due date), but 

you do not pay. Assuming accrued 

interest is $100 on the day the debt is 

referred to Treasury, we will refer 

$1,628 to Treasury, calculated as 

follows: 

$1,000 royalties + $100 interest + 

$436 administrative costs = $1,536 + 

$92 penalty charge (6 percent × 

$1,536 = $92.16, rounded to $92) = 

$1,628. 

Like Federal Oil and Gas Royalty 

Management Act (FOGRMA) civil 

penalties (30 U.S.C. 1719), the DCIA 

does not designate where MMS should 

deposit penalties collected. Therefore, 

as in the case of FOGRMA civil 

penalties, MMS would deposit such 

monies in the Treasury General Fund. 

Unlike FOGRMA, the DCIA does not 

provide that civil penalties can be 

shared with states and tribes in certain 

circumstances (30 U.S.C. 1736). Because 

we have no such statutory authority, we 

will not share penalties collected under 

this rule with any state, county, or tribe. 

Subsection (c) explains that MMS 

would assess $436 in fees for 

administrative costs for each referral of 

debt to Treasury incurred because of the 

debtor’s failure to pay the debt. 

Consistent with the FCCS (31 CFR 

901.9(c)), we calculated the $436 

administrative cost we propose to assess 

in this rule based on our estimate of the 

average actual costs we incur to refer 

debts to Treasury. Administrative costs 

include (1) the cost of providing a copy 

of the file to the debtor; and (2) the costs 

incurred in processing and handling the 

debt because it became delinquent; e.g., 

costs incurred in obtaining a credit 

report or in using a private collection 

contractor or service fees charged by a 

Federal Agency for collection activities 

undertaken on our behalf. 

The debt referral tasks are currently 

performed by employees paid at the 

United States 2009 General Schedule, 

Grade 12 pay-scale level, and at the 

Grade 13 pay-scale level. On average, 

the current time it takes for these 

employees to refer debts to Treasury is 

an MMS burden of 2 hours for the Grade 

13 employee, plus 5 hours for the Grade 

12 employee(s) for each referral. The 

hourly labor cost is calculated as 

follows: 

$39.35 per hour (2009 GS–12, Step 5) 

× 1.5 (benefits factor) = $59.03; and 

$46.80 per hour (2009 GS–13, Step 5) 

× 1.5 (benefits factor) = $70.20. 

We calculated the estimated 

administrative costs proposed under 

this rule as follows: 

5 hours × $59.03 (GS–12, Step 5) + 2 

hours × $70.20 (GS–13, Step 5) = 

$435.55, rounded to $436 (which 

includes the benefits factor), per 

referral. 

Because our administrative costs will 

increase with time, paragraph (c) would 

also provide that MMS may publish a 

notice of any such increase in the 

Federal Register. 

Subsection (d) would meet the 

requirement of 31 CFR 901.9(h), that 

agency regulations address the 

imposition of interest and related 

charges during periods in which debts 

are under appeal. Subsection (d) does so 

by specifying that an appeal would not 

toll the accrual of interest, penalties, or 

administrative costs. 

Subsection (e) explains how MMS 

would apply partial or installment 

payments a debtor makes on delinquent 

debts sent to Treasury. We would apply 

any such partial or installment 

payments first to outstanding penalty 

assessments, second to administrative 

costs, third to accrued interest, and 

fourth to the outstanding debt principal. 

Subsection (f) would remove any 

ambiguity regarding our authority and 

intent to impose interest, penalty 

charges, and administrative costs for 

debt not subject to 31 U.S.C. 3717. We 

impose a variety of charges on 

outstanding obligations under other 

statutory or regulatory authority. 

Subsection (g) would implement and 

define the discretionary authority 

granted to MMS in 31 U.S.C. 3717(h) for 

the Director to waive collection of 

accrued interest, penalty charges, or 


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administrative costs. Consistent with 31 

CFR 901.9(g), subsection (g) would 

provide that MMS may decide to waive 

collection of all or portions of these 

costs as part of a compromise, or if we 

determine that collection would be 

against equity and good conscience, or 

not in ‘‘the Government’s best interest.’’ 

In determining what constitutes ‘‘the 

Government’s best interest,’’ we will 

consider the interests of the Federal 

Government, Indian tribes, states, and 

the United States as a whole, consistent 

with our mission to collect, account for, 

and disburse revenues. This approach is 

consistent with 31 CFR 901.9(g), which 

qualifies ‘‘best interest’’ as being the best 

interest of the United States. ‘‘Equity,’’ 

‘‘good conscience,’’ and ‘‘best interests’’ 

are all inherently subjective. 

In keeping with the discretionary 

nature of our authority to collect and 

waive collection of charges, subsection 

(h) would specify that our decision to 

collect or waive is final for the 

Department and not subject to 

administrative review. 

F. 30 CFR 218.705 What is MMS’s 

policy on revoking the ability to engage 

in Federal or Indian leasing, licensing, 

or granting of easements, permits, or 

rights-of-way? 

Section 218.705 would explain 

MMS’s discretion, consistent with 31 

CFR 901.6(b), to recommend suspension 

or revocation of a debtor’s ability to 

engage in Federal or Indian leasing 

activities when a debtor inexcusably or 

willfully fails to pay a debt. This section 

is intended to give debtors an incentive 

to take diligent and prompt action to 

pay their debts. For offshore leases that 

MMS issues, MMS may directly use the 

authority provided in 31 CFR 901.6(b) to 

revoke a debtor’s ability to engage in 

leasing activities. The MMS may not 

itself revoke a debtor’s ability to engage 

in leasing activities conducted by BLM 

and the Bureau of Indian Affairs (BIA); 

we are constrained to making 

recommendations to these bureaus. This 

section would ensure debtors are aware 

that certain failures to pay may have 

significant consequences that are not 

directly related to the specific debt. 

G. 30 CFR 218.706 What debts can 

MMS refer to Treasury for collection by 

administrative and tax refund offset? 

Subsection (a) would incorporate the 

pertinent requirements of regulations 

governing the referral to Treasury of 

debt for collection through 

administrative and tax refund offset in 

31 CFR 901.3, 285.2, and 285.5. Thus, 

this subsection would limit the claims 

that MMS may refer for offset to claims 

that are (1) Past due, (2) legally 

enforceable, and (3) at least $25.00 or 

another amount established by 

Treasury, provided that the debtor has 

had notice for at least 60 days and that 

the debt or claim has not been 

delinquent for more than 10 years. 

Subsection (a) also would exclude from 

referral any claims for offset of any 

Federal oil and gas lease obligations for 

which offset is precluded under 30 

U.S.C. 1724(b)(3). 

Subsection (b) clarifies that the time 

restrictions noted in subsection (a) 

would not limit our authority to refer to 

Treasury, for tax refund offset, those 

debts that have been included in courtordered judgments. 

III. Procedural Matters 

1. Summary Cost and Royalty Impact 

Data 

This is a technical rule formalizing 

and enhancing current MMS debt 

collection practices and procedures 

consistent with the statutory mandates 

under the DCA and DCIA. The proposed 

changes explained above would have no 

royalty impacts on industry, state and 

local governments, Indian tribes and 

individual Indian mineral owners, and 

the Federal Government. Industry 

would incur additional administrative 

costs and penalties under this proposed 

rulemaking. 

A. Industry 

(1) Royalty Impacts. None. 

(2) Administrative Costs. The MMS 

would assess $436 for recovery of 

administrative costs for each referral of 

debt to Treasury. We calculated the 

$436 administrative costs proposed in 

this rule based on our estimate of the 

average actual costs we incur to refer 

debts to Treasury. 

(3) Penalties. The MMS would assess 

a penalty of 6 percent on the principal, 

interest, and administrative costs on any 

delinquent debt that is more than 90 

days from the date of delinquency 

consistent with the DCIA (31 U.S.C. 

3717(e)(2)), and FCCS (31 CFR 901.9(d)). 

(See Section II Explanation of Proposed 

Amendments.) 

B. State and Local Governments 

(1) Royalty Impacts. None. 

(2) Administrative Costs—State and 

Local Governments. The MMS 

determined that this proposed rule 

would have no administrative costs for 

state and local governments. 

(3) Penalties. None. 

C. Indian Tribes and Individual Indian 

Mineral Owners 

(1) Royalty Impacts. None. 

(2) Administrative Costs. The MMS 

determined that this proposed rule 

would have no administrative costs to 

Indian tribes and individual Indian 

mineral owners. 

(3) Penalties. None. 

D. Federal Government 

(1) Royalty Impacts. None. 

(2) Administrative Costs. The 

proposed rule would have no net 

administrative costs to the Federal 

Government. All administrative costs to 

the Government incurred as a result of 

collection activities would be recovered 

from industry. 

(3) Penalties. Based on historical data, 

we estimate that approximately $79,380 

in penalties would be referred annually 

to Treasury. We estimate the annual 

penalties as follows: 

• The average number of delinquent 

debts referred annually = 300. 

• The average amount referred 

(principal and interest) annually = 

$2,569,214. 

• Administrative costs recovered of 

$436 × 300 debts = $130,800. 

• Amount on which to base 6 percent 

penalty = $2,700,014 ($2,569,214 

(royalties plus interest) + $130,800 

(administrative costs)). 

• Assuming all debts were 179 days 

past due at the time of referral (because 

MMS has 180 days to refer the debt), 

penalties referred annually = $79,380 

(179/365 × 6 percent = 0.0294 × 

$2,700,014 = $79,380). 

2. Regulatory Planning and Review (E.O. 

12866) 

This document is not a significant 

rule, and the Office of Management and 

Budget (OMB) has not reviewed this 

proposed rule under Executive Order 

12866. We have made the assessments 

required by E.O. 12866, and the results 

are given below. 

a. This proposed rule would not have 

an effect of $100 million or more on the 

economy. It would 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 is a technical rule 

formalizing and enhancing current 

MMS debt collection practices and 

procedures consistent with the statutory 

mandates under the DCA and DCIA. The 

impact to industry would be additional 

administrative costs, including 

penalties. We estimate administrative 

costs, including penalties, to be less 

than $500,000 per year. 

b. This proposed rule would not 

create a serious inconsistency or 

otherwise interfere with an action taken 

or planned by another agency. 

c. This proposed rule would not alter 

the budgetary effects of entitlements, 


emcdonald on DSK2BSOYB1PROD with PROPOSALS
Federal Register / Vol. 75, No. 109 / Tuesday, June 8, 2010 / Proposed Rules 32347 

grants, user fees, or loan programs or the 

rights or obligations of their recipients. 

d. This proposed rule would not raise 

novel legal or policy issues. 

3. Regulatory Flexibility Act 

The Department of the Interior 

certifies that this proposed rule would 

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.). This proposed rule 

would affect large and small entities but 

would not have a significant economic 

effect on either. Based on historical 

data, we estimate that the proposed rule 

would affect approximately 85 small 

entities per year. 

4. Small Business Regulatory 

Enforcement Fairness Act (SBREFA) 

This proposed rule is not a major rule 

under 5 U.S.C. 804(2), the Small 

Business Regulatory Enforcement 

Fairness Act. This proposed rule: 

a. Would not have an annual effect on 

the economy of $100 million or more. 

This is a technical rule formalizing and 

enhancing current MMS debt collection 

practices and procedures consistent 

with the statutory mandates under the 

DCA and DCIA. Industry would incur 

fees for administrative costs and 

penalties for failure to pay a delinquent 

debt to the Federal Government. These 

administrative costs and penalties 

would be avoided by paying delinquent 

debts owed to the Federal Government 

accurately and timely. 

b. Would not cause a major increase 

in costs or prices for consumers, 

individual industries, Federal, state, or 

local government agencies, or 

geographic regions. 

c. Would 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 proposed rule would not impose 

an unfunded mandate on state, local, or 

tribal governments, or the private sector 

of more than $100 million per year. This 

proposed rule would 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. 

This is a technical rule formalizing 

and enhancing current MMS debt 

collection practices and procedures 

consistent with the statutory mandates 

under the DCA and DCIA. This 

proposed rule would allow MMS to 

assess a 6-percent penalty on delinquent 

debts and impose fees to cover the 

administrative costs of recovering a 

delinquent debt. These penalties and 

recovery of administrative costs are 

mandated by the DCA and DCIA. 

6. Takings (E.O. 12630) 

Under the criteria in Executive Order 

12630, this proposed rule would not 

have any significant takings 

implications. This proposed rule would 

apply to Federal and Indian leases only. 

It would not apply to private property. 

A takings implication assessment is not 

required. 

7. Federalism (E.O. 13132) 

Under the criteria in Executive Order 

13132, this proposed rule would not 

have sufficient federalism implications 

to warrant the preparation of a 

Federalism Assessment. This is a 

technical rule formalizing and 

enhancing current MMS debt collection 

practices and procedures. A Federalism 

Assessment is not required. 

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

This proposed rule would comply 

with the requirements of Executive 

Order 12988. Specifically, this rule: 

a. Would meet the criteria of section 

3(a) requiring that all regulations be 

reviewed to eliminate errors and 

ambiguity and be written to minimize 

litigation; and 

b. Would meet the criteria of section 

3(b)(2) requiring that all regulations be 

written in clear language and contain 

clear legal standards. 

9. Consultation With Indian Tribes (E.O. 

13175) 

Under the criteria in Executive Order 

13175, we have evaluated this proposed 

rule and determined that it would have 

no potential effects on federally 

recognized Indian tribes. 

10. Paperwork Reduction Act 

This proposed rule does not contain 

information collection requirements, 

and a submission to OMB is not 

required under the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501 

et seq.). 

11. National Environmental Policy Act 

This proposed rule would 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. 

12. Data Quality Act 

In developing this proposed rule, we 

did not conduct or use a study, 

experiment, or survey requiring peer 

review under the Data Quality Act (Pub. 

L. 106–554). 

13. Effects on the Energy Supply (E.O. 

13211) 

This proposed rule would not be a 

significant energy action under the 

definition in Executive Order 13211. A 

Statement of Energy Effects would not 

be required. 

14. Clarity of This Regulation 

We are required by Executive Orders 

12866 and 12988 and by the 

Presidential Memorandum of June 1, 

1998, to write all rules in plain 

language. This means that each rule we 

publish must: (a) Be logically organized; 

(b) Use the active voice to address 

readers directly; (c) Use clear language 

rather than jargon; (d) Be divided into 

short sections and sentences; and (e) 

Use lists and tables wherever possible. 

If you feel that we have not met these 

requirements, send us comments by one 

of the methods listed in the ADDRESSES

section. To better help us revise the 

rule, your comments should be as 

specific as possible. For example, you 

should tell us the numbers of the 

sections or paragraphs that are unclearly 

written, which sections or sentences are 

too long, the sections where you feel 

lists or tables would be useful, etc. 

15. Public Availability of Comments 

Before including your address, phone 

number, e-mail address, or other 

personal identifying information in your 

comment, you should be aware that 

your entire comment—including your 

personal identifying information—may 

be made publicly available at any time. 

While you can ask us in your comment 

to withhold your personal identifying 

information from public view, we 

cannot guarantee that we will be able to 

do so. 

List of Subjects in 30 CFR part 218 

Administrative offset, Debt Collection 

Act of 1982 and Debt Collection 

Improvement Act of 1996, royalties, 

rentals, bonuses, Federal and Indian 

mineral leases, Administrative 

Procedure Act, collections. 

Dated: May 24, 2010. 

Ned Farquhar, 

Deputy Assistant Secretary for Land and 

Minerals Management. 

For the reasons stated in the 

preamble, the Minerals Management 

Service proposes to amend 30 CFR part 

218 as set forth below: 


emcdonald on DSK2BSOYB1PROD with PROPOSALS
32348 Federal Register / Vol. 75, No. 109 / Tuesday, June 8, 2010 / Proposed Rules 

PART 218—COLLECTION OF MONIES 

AND PROVISION FOR GEOTHERMAL 

CREDITS AND INCENTIVES 

1. The authority citation for part 218 

is revised 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. 3335, 3711, 3716–18, 

3720A, 9701; 43 U.S.C. 1301 et seq., 1331 et 

seq., and 1801 et seq. 

2. Add subpart J to read as follows: 

Subpart J—Debt Collection and 

Administrative Offset 

Sec. 

218.700 What definitions apply to the 

regulations in this subpart? 

218.701 What is MMS’s authority to issue 

these regulations? 

218.702 What happens to delinquent debts 

a debtor owes MMS? 

218.703 What notice will MMS give to a 

debtor of our intent to collect a debt? 

218.704 What is MMS’s policy on interest, 

penalty charges, and administrative 

costs? 

218.705 What is MMS’s policy on revoking 

the ability to engage in Federal or Indian 

leasing, licensing, or granting of 

easements, permits, or rights-of-way? 

218.706 What debts can MMS refer to 

Treasury for collection by administrative 

and tax refund offset? 

Subpart J—Debt Collection and 

Administrative Offset 

§ 218.700 What definitions apply to the 

regulations in this subpart? 

As used in this subpart: 

(a) Administrative offset means the 

withholding of funds payable by the 

United States (including funds payable 

by the United States on behalf of a state 

government) to any person, or the 

withholding of funds held by the United 

States for any person, in order to satisfy 

a debt owed to the United States. 

(b) Agency means a department, 

agency, court, court administrative 

office, or instrumentality in the 

executive, judicial, or legislative branch 

of government, including a government 

corporation. 

(c) BIA means the Bureau of Indian 

Affairs. 

(d) BLM means the Bureau of Land 

Management. 

(e) Day means calendar day. To count 

days, include the last day of the period 

unless it is a Saturday, Sunday, or 

Federal legal holiday. 

(f) Debt and claim are synonymous 

and interchangeable. They refer to, 

among other things, royalties, rentals, 

and any other monies due to the United 

States or MMS, as well as fines, fees, 

and penalties that a Federal Agency has 

determined are due to the United States 

from any person, organization, or entity, 

except another Federal Agency. For the 

purposes of administrative offset under 

31 U.S.C. 3716 and this subpart, the 

terms ‘‘debt’’ and ‘‘claims’’ include 

money, funds, or property owed to the 

United States, a state, the District of 

Columbia, American Samoa, Guam, the 

U.S. Virgin Islands, the Commonwealth 

of the Northern Mariana Islands, or the 

Commonwealth of Puerto Rico. 

(g) Debtor means a lessee, payor, 

person, contractor, or other entity that 

owes a debt to the United States, MMS, 

or from whom MMS collects debts on 

behalf of the United States, the 

Department, or an Indian lessor. 

(h) Delinquent debt means a debt that 

has not been paid within the time limit 

prescribed by the applicable Act, law, 

regulation, lease, order, demand, notice 

of noncompliance, and/or assessment of 

civil penalties, contract, or any other 

agreement to pay the Department 

money, funds, or property. 

(i) Department means the Department 

of the Interior, and any of its bureaus. 

(j) Director means the Director of 

Minerals Management Service, or his or 

her designee. 

(k) DOJ means the U.S. Department of 

Justice. 

(l) FCCS means the Federal Claims 

Collection Standards, which are 

published at 31 CFR parts 900–904. 

(m) FMS means the Financial 

Management Service, a bureau of the 

U.S. Department of the Treasury. 

(n) Legally enforceable means that 

there has been a final agency 

determination that the debt, in the 

amount stated, is due, and there are no 

legal bars to collection by offset. 

(o) Lessee means any person to whom 

the United States or an Indian tribe or 

individual Indian mineral owner issues 

a Federal or Indian mineral or other 

resource lease, easement, right-of-way, 

or other agreement, regardless of form, 

an assignee of all or a part of the record 

title interest, or any person to whom 

operating rights have been assigned. 

(p) MMS means the Minerals 

Management Service, a bureau of the 

Department. 

(q) OCS means Outer Continental 

Shelf. 

(r) Payor means any person who 

reports and pays royalties on Indian 

mineral leases, or Federal oil and gas, 

solid, or geothermal leases, regardless of 

whether they are also a lessee. 

(s) Person includes a natural person or 

persons, profit or non-profit 

corporation, partnership, association, 

trust, estate, consortium, or other entity 

that owes a debt to the United States, 

excluding the United States. 

(t) Tax refund offset means the 

reduction of a tax refund by the amount 

of a past-due legally enforceable debt. 

§ 218.701 What is MMS’s authority to issue 

these regulations? 

(a) The MMS is issuing the 

regulations in this subpart under the 

authority of the FCCS; the Debt 

Collection Act of 1982, and the Debt 

Collection Improvement Act of 1996, 31 

U.S.C. 3711, 3716–3718, and 3720A. 

(b) The MMS hereby adopts the 

provisions of the FCCS (31 CFR parts 

900–904). The MMS regulations 

supplement the FCCS as necessary. 

§ 218.702 What happens to delinquent 

debts a debtor owes MMS? 

(a) The MMS will collect debts from 

debtors in accordance with the 

regulations in this subpart. 

(b) The MMS will transfer to the U.S. 

Department of the Treasury any past 

due, legally enforceable nontax debt that 

is delinquent within 180 days from the 

date the debt becomes delinquent so 

that Treasury may take appropriate 

action to collect the debt or terminate 

the collection action in accordance with 

5 U.S.C. 5514, 26 U.S.C. 6402, 31 U.S.C. 

3711 and 3716, the FCCS, 5 CFR 

550.1108, and 31 CFR part 285. 

§ 218.703 What notice will MMS give to a 

debtor of our intent to collect a debt? 

(a) When the Director determines that 

a debt is owed to MMS, the Director will 

send a written notice (Notice), also 

known as a Demand Letter. The Notice 

will be sent by facsimile or mail to the 

most current address known to us. The 

Notice will inform the debtor of the 

following: 

(1) The amount, nature, and basis of 

the debt; 

(2) The methods of offset that may be 

employed; 

(3) The debtor’s opportunity to 

inspect and copy agency records related 

to the debt; 

(4) The debtor’s opportunity to enter 

into a written agreement with us to 

repay the debt; 

(5) Our policy concerning interest, 

penalty charges, and administrative 

costs, as set out in § 218.704, including 

a statement that such assessments must 

be made against the debtor unless 

excused in accordance with the FCCS 

and this part; 

(6) The date by which payment 

should be made to avoid additional late 

charges and enforced collection; 

(7) The name, address, and telephone 

number of a contact person (or office) at 

MMS who is available to discuss the 

debt; and 

(8) The debtor’s opportunity for 

review under 30 CFR part 290 or part 


emcdonald on DSK2BSOYB1PROD with PROPOSALS
Federal Register / Vol. 75, No. 109 / Tuesday, June 8, 2010 / Proposed Rules 32349 

241, if any. See paragraph (b) of this 

section. 

(b) A debtor, whose delinquent debt: 

(1) Has not been paid within the time 

limit prescribed by the applicable Act, 

law, regulation, lease, order, demand, 

notice of noncompliance, and/or 

assessment of civil penalties, contract, 

or any other agreement to pay the 

Department money, funds, or property; 

and 

(2) Was the subject of an order, 

demand, notice of noncompliance, and/ 

or assessment of civil penalties that was 

appealable under 30 CFR part 290 or 

part 241, may not re-litigate matters that 

were the subject of the final order or 

appeal decision. This subsection applies 

whether or not the debtor appealed the 

order, demand, notice of 

noncompliance, and/or assessment of 

civil penalties under 30 CFR part 290 or 

part 241. 

§ 218.704 What is MMS’s policy on 

interest, penalty charges, and 

administrative costs? 

(a) Interest. 

(1) The MMS will assess interest on 

all delinquent debts unless prohibited 

by statute, regulation, or contract. 

(2) Interest begins to accrue on all 

debts from the date that the debt 

becomes delinquent unless otherwise 

specified by law or lease terms. 

(3) The MMS will assess interest on 

debts involving Federal and Indian oil 

and gas leases under 30 CFR 218.54 and 

218.102 unless otherwise specified by 

lease terms. 

(4) The MMS will assess interest on 

debts involving Federal and Indian solid 

mineral and geothermal leases under 30 

CFR 218.202 and 218.302 unless 

otherwise specified by lease terms. 

(b) Penalties. We will assess a penalty 

charge of 6 percent a year on any 

delinquent debt, interest, and 

administrative costs assessed under 

paragraph (c) of this section on any debt 

we refer to Treasury at the time we refer 

the debt to Treasury: 

(1) After the debt has been delinquent 

for more than 90 days; and 

(2) The penalty will accrue from the 

date of delinquency. 

(c) Administrative costs. We will 

assess $436.00 for administrative costs 

incurred as a result of the debtor’s 

failure to pay a delinquent debt. We will 

publish a notice of any increase in 

administrative costs assessed under this 

section in the Federal Register. 

(d) Interest, penalties, and 

administrative costs will continue to 

accrue throughout any appeal process. 

(e) Allocation of payments. The MMS 

will apply a partial or installment 

payment by a debtor on a delinquent 

debt sent to Treasury first to outstanding 

penalty assessments, second to 

administrative costs, third to accrued 

interest, and fourth to the outstanding 

debt principal. 

(f) Additional authority. The MMS 

may assess interest, penalty charges, 

and administrative costs on debts that 

are not subject to 31 U.S.C. 3717 to the 

extent authorized under common law or 

other applicable statutory or regulatory 

authority. 

(g) Waiver. Regardless of the amount 

of the debt, the Director may decide to 

waive collection of all or part of the 

accrued penalty charges or 

administrative costs either in 

compromise of the delinquent debt or if 

the Director determines collection of 

these charges would be against equity 

and good conscience or not in the 

Government’s best interest. 

(h) Our decision whether to collect or 

waive collection of penalties and 

administrative costs is the final decision 

for the Department and is not subject to 

administrative review. 

§ 218.705 What is MMS’ policy on revoking 

the ability to engage in Federal or Indian 

leasing, licensing, or granting of 

easements, permits, or rights-of-way? 

For OCS leases, the Director may 

decide to revoke a debtor’s ability to 

engage in Federal OCS leasing, 

licensing, or granting of easements, 

permits, or rights-of-way if the debtor 

inexcusably or willfully fails to pay a 

debt. The Director may also recommend 

that BLM or BIA revoke a debtor’s 

ability to engage in Federal onshore and 

Indian leasing, licensing, or granting of 

easements, permits, or rights-of-way if 

the debtor inexcusably or willfully fails 

to pay a debt. The Director will 

recommend that revocation of a debtor’s 

ability to engage in Federal or Indian 

leasing, licensing, or granting of 

easements, permits, or rights-of-way 

should last only as long as the debtor’s 

indebtedness. 

§ 218.706 What debts can MMS refer to 

Treasury for collection by administrative 

and tax refund offset? 

(a) The MMS may refer any past due, 

legally enforceable debt of a debtor to 

Treasury for administrative and tax 

refund offset at least 60 days after we 

give notice to the debtor under section 

218.703 if the debt: 

(1) Will not have been delinquent 

more than 10 years at the time the offset 

is made; 

(2) Is at least $25.00 or another 

amount established by Treasury; and 

(3) Does not involve Federal oil and 

gas lease obligations for which offset is 

precluded under 30 U.S.C. 1724(b)(3). 

(b) Debts reduced to judgment may be 

referred to Treasury for tax refund offset 

at any time. 

[FR Doc. 2010–13646 Filed 6–7–10; 8:45 am] 

BILLING CODE 4310–MR–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 117 

[Docket No. USCG–2009–0308] 

RIN 1625–AA09 

Drawbridge Operation Regulation; Old 

River, Between Victoria Island and 

Byron Tract, CA 

AGENCY: Coast Guard, DHS. 

ACTION: Advance notice of proposed 

rulemaking. 

SUMMARY: The Coast Guard is seeking 

comments and information on how best 

to address a proposal to change the 

operating regulation for the State 

Highway 4 Drawbridge, mile 14.8, over 

Old River. The bridge owner has asked 

to change from the existing requirement 

by eliminating the ‘‘on signal’’ openings 

and replacing them with an ‘‘open on 

signal if at least 4 hours notice is given’’ 

at all times. The 4 hour notice would be 

provided to the drawtender at the Rio 

Vista drawbridge across the Sacramento 

River, mile 12.8. This proposed change 

may reduce unnecessary staffing of the 

drawbridge during observed periods of 

reduced navigational activity. 

DATES: Comments and related material 

must reach the Coast Guard on or before 

July 23, 2010. 

ADDRESSES: You may submit comments 

identified by docket number USCG– 

2009–0308 using any one of the 

following methods: 

(1) Federal eRulemaking Portal: 

http://www.regulations.gov. 

(2) Fax: 202–493–2251. 

(3) Mail: Docket Management Facility 

(M–30), U.S. Department of 

Transportation, West Building Ground 

Floor, Room W12–140, 1200 New Jersey 

Avenue, SE., Washington, DC 20590– 

0001. 

(4) Hand Delivery: Same as mail 

address above, between 9 a.m. and 5 

p.m., Monday through Friday, except 

Federal holidays. The telephone number 

is 202–366–9329. To avoid duplication, 

please use only one of these four 

methods. See the ‘‘Public Participation 

and Request for Comments’’ portion of 

the SUPPLEMENTARY INFORMATION section 

below for instructions on submitting 

comments. 


emcdonald on DSK2BSOYB1PROD with PROPOSALS