Federal Register / Vol. 60, No. 9 / Friday, January 13, 1995 / Rules and Regulations 3085

be effective from January 1, 1995,

through March 31, 1995. This rate

represents an increase of .75 percent

from the rate in effect for the fourth

quarter of 1994. This rate is based on the

prime rate in effect on December 15,

1994.

The appendix to 29 CFR part 2644

does not prescribe interest rates under

the regulation; the rates prescribed in

the regulation are those published in

Statistical Release H.15. The appendix

merely collects and republishes the

rates in a convenient place. Thus, the

interest rates in the appendix are

informational only. Accordingly, the

PBGC finds that notice of and public

comment on this amendment would be

unnecessary and contrary to the public

interest. For the above reasons, the

PBGC also believes that good cause

exists for making this amendment

effective immediately.

The PBGC has determined that this

action is not a ‘‘significant regulatory

action’’ under the criteria set forth in

Executive Order 12866, because it will

not have an annual effect on the

economy of $100 million or more or

adversely affect in a material way the

economy, a sector of the economy,

productivity, competition, jobs, the

environment, public health or safety, or

State, local, or tribal governments or

communities; create a serious

inconsistency or otherwise interfere

with an action taken or planned by

another agency; materially alter the

budgetary impact of entitlements,

grants, user fees, or loan programs or the

rights and obligations of recipients

thereof; or raise novel legal or policy

issues arising out of legal mandates, the

President’s priorities, or the principles

set forth in Executive Order 12866.

Because no general notice of proposed

rulemaking is required for this

amendment, the Regulatory Flexibility

Act of 1980 does not apply. See 5 U.S.C.

601(2).

List of Subjects in 29 CFR Part 2644

Employee benefit plans, Pensions.

In consideration of the foregoing, part

2644 of subchapter F of chapter XXVI of

title 29, Code of Federal Regulations, is

amended as follows:

PART 2644—NOTICE AND

COLLECTION OF WITHDRAWAL

LIABILITY

1. The authority citation for part 2644

continues to read as follows:

Authority: 29 U.S.C. 1302(b)(3), 1399(c)(6).

2. Appendix A to part 2644 is

amended by adding to the end of the

table a new entry to read as follows:

Appendix A to Part 2644—Table of

Interest Rates

* * * * *

From To Date of

quotation

Rate

(percent)

* * * * *

1/01/95 3/31/95 12/15/94 8.50

Issued in Washington, DC, on this 10th day

of January 1995.

Martin Slate,

Executive Director, Pension Benefit Guaranty

Corporation.

[FR Doc. 95–967 Filed 1–12–95; 8:45 am]

BILLING CODE 7708–01–M

DEPARTMENT OF THE INTERIOR

Minerals Management Service

30 CFR Part 218

RIN 1010–AB40

Regulations Governing Recoupment of

Overpayments on Indian Mineral

Leases

AGENCY: Minerals Management Service

(MMS), Interior.

ACTION: Final rule.

SUMMARY: The Minerals Management

Service (MMS) is amending its Royalty

Management Program regulations to

codify longstanding policy with respect

to recoupment of overpayments made

by lessees and other payors on Indian

mineral leases. The established policy is

that recoupments cannot exceed 50

percent of the reported revenues in the

current month on an allotted lease or

100 percent of the reported revenues in

the current month on a tribal lease.

EFFECTIVE DATE: February 13, 1995.

FOR FURTHER INFORMATION CONTACT:

David S. Guzy, Chief, Rules and

Procedures Staff at (303) 231–3432, FAX

(303) 231–3194.

SUPPLEMENTARY INFORMATION: The

principal author of this final rule is

Marvin D. Shaver of the Royalty

Management Program, Rules and

Procedures Staff, Lakewood, Colorado.

I. Background

In the Notice of Proposed Rulemaking

(55 FR 3232, January 31, 1990), MMS

described the current policy regarding

recoupment of overpayments made by

lessees and other payors on Indian

mineral leases. As stated in the

proposed rule, royalty payments on

production from mineral leases are a

major source of income to many Indian

allottees and tribes and, for some

allottees, the only source.

The current policy permits lessees

and payors to recoup overpayments as

a credit against future rental or royalty

accruals due to Indian tribes or allottees.

Lessees and operators were instructed to

follow the recoupment policy in ‘‘Notice

to Lessees and Operators of Indian Oil

and Gas Leases No. 1A’’ (NTL–1A),

issued by the Conservation Division of

the U.S. Geological Survey in 1977.

Section IX of NTL–1A provided that in

the case of tribal leases the credit must

be against the same lease or, with

approval of the tribe, against amounts

due under other tribal leases. In the case

of allotted leases, such credits were

limited to the lease on which the

overpayments were made with recovery

of the overpayment prorated over a

period of time necessary to prevent an

allottee’s current monthly revenue being

reduced by more than 50 percent. This

recoupment policy was adopted by

MMS and instructions were included in

Volume II of the MMS ‘‘Oil and Gas

Payor Handbook’’ by Addendum No. 12,

effective December 1, 1983. Also,

instructions were included in the

revised MMS ‘‘Oil and Gas Payor

Handbook’’ issued in December 1986

(Section 3.7, ‘‘Reporting Indian

Overpayment Recoupments’’). The

instructions are also included in the

MMS ‘‘AFS Payor Handbook—Solid

Minerals’’ issued in September 1984

(Chapter 5, ‘‘Recoupments on Indian

Leases’’). These payor handbooks have

been provided to all royalty payors on

Federal and Indian leases for specific

guidance with respect to reporting

requirements on oil and gas and solid

mineral leases.

MMS published in the Federal

Register revised final oil and gas

product valuation regulations at 30 CFR

Part 206 on January 15, 1988, effective

March 1, 1988 (53 FR 1184 and 53 FR

1230). Paragraph 206.150(e)(2) of the

revised regulations terminated NTL–1A.

However, MMS’ policy and procedure

remained in the payor handbooks.

Although the Indian lease

overpayment recoupment policy has

been the same for many years, MMS has

determined that its regulations should

state the policy. Consequently, MMS

published the January 31, 1990,

proposed rulemaking to codify the

policy and procedure. In response to the

proposed rule, MMS received comments

from four lessees/payors and other

interested parties. All of these

comments were considered in the final

rule and are discussed in Section II

below. The final rule is summarized in

Section III below.
3086 Federal Register / Vol. 60, No. 9 / Friday, January 13, 1995 / Rules and Regulations

II. Comments Received on Proposed

Rule

The proposed rule provided for a 30-

day public comment period, which

ended March 2, 1990. Four commenters

(three industry and one Indian

representative) submitted comments

during the comment period which are

addressed in this section.

Comment: The Indian representative

objected to the proposed requirement

that BIA approval be obtained before

lessees and payors could recoup more

than 50 percent of the monthly reported

revenues on an individual allotted lease.

This objection was based on the

commenter’s opinion that BIA is illequipped to make an independent

determination of the propriety of any

claimed overpayment. Because there is

an obvious adverse impact on allottees

subject to recoupment, this commenter

recommended that the final rule require

prior consultation and concurrence of

the affected allottee regarding requests

from lessees and payors to recoup more

than 50 percent of reported revenues in

an individual month.

Response: MMS agrees with the

commenter’s recommendation with

respect to affected Indian allottees.

However, in many situations, it may be

impractical to obtain concurrence for

more than a 50 percent recoupment

from all affected Indians in a timely

manner. Therefore, the final regulation

was changed and no longer provides for

such an exception to the 50 percent

recoupment limitation on allotted

leases.

Comment: One industry commenter

agreed with the proposed recoupment

procedure and in general with the

proposed limitation. However, the

commenter expressed concern regarding

the need for expeditious handling of

requests for recoupments in excess of

the limitation. The commenter

emphasized that it was important that

the request for any recoupment above

the limitation be processed timely,

unless interest could be recovered by

the lessee on the overpayment.

Response: Since the final regulation

no longer provides for recoupments in

excess of the limitations, expeditious

handling of such requests is a moot

point. In regard to interest on

overpayments, MMS does not have legal

authority to pay interest on

overpayments made by lessees and

payors.

Comment: Another industry

commenter agreed that MMS regulations

should establish the recoupment policy.

However, this commenter questioned

the necessity for the requirement that

written permission be obtained from a

tribe before overpayments made on one

lease could be recouped from a different

tribal lease. In this commenter’s

opinion, a lessee or payor should be

able to take a credit and recoup any

overpayment against any and all of its

producing leases with that tribe without

requiring that tribe’s approval, because

the tribe’s revenue is generally not

limited to a single lease.

Response: Royalty payments on

production from mineral leases are a

major source of income to many tribes.

When a lessee or payor can recoup an

overpayment against payments due on

all producing tribal leases without

permission, the tribe cannot plan the

distribution of royalty revenues with

reasonable accuracy.

In order that the tribe may plan for

decreases in royalty revenues, MMS has

determined that a payor must obtain

written permission from the tribe to

recoup overpayments made on one

tribal lease from a different tribal lease.

Paragraphs 218.53(b) and 218.203(b) of

the final rule require that the payor

provide MMS with a copy of the tribe’s

written permission in accordance with

instructions provided in the ‘‘Oil and

Gas Payor Handbook’’ and the ‘‘AFS

Payor Handbook—Solid Minerals’’.

Comment: A different industry

commenter who was in general support

of the proposed rule stated that a strict

application of the policy may, in some

cases, be inequitable. For example, if a

lessee or payor is required to make a

payment to an Indian allottee on a Bill

for Collection that is under appeal and

the lessee or payor prevails on the

appeal, the lessee/payor may not be able

to recoup if the company is no longer

the payor on the lease or the level of

production on the lease has declined to

a point where recoupment is not an

adequate remedy. In this commenter’s

opinion, it would not be good policy in

these situations to allow an allottee to

keep the payment and prevent the lessee

from otherwise obtaining a refund. The

commenter recommended that the final

rule allow lessees to obtain a cash

refund when recoupment is an

inadequate remedy.

Response: MMS recognizes the merit

of this commenter’s concerns. However,

this situation can be avoided if the

payor, in accordance with 30 CFR 243.2,

elects to post a surety pending a

decision on the appeal rather than

submitting payment. If the appellant

prevails on its appeal, the surety would

be returned and recoupment or refund

of a payment would not be necessary. If

the payor elects to submit payment and

is not able to recoup the payment, MMS

does not have legal authority to refund

the payment from general funds, but can

seek a special congressional

appropriation for the amount of any

refund due to the payor.

Comment: One industry commenter

state that any rulemaking that would

deny or delay recovery of any

overpayment, other than under a strict

statute of limitations imposed equitably

on both the Indian(s) and lessee, would

be a violation of Executive Order 12630,

‘‘Government Actions and Interference

with Constitutionally Protected Property

Rights.’’

Response: A continuing payor with

sufficient recoupable balances would

not be denied recoupment of any

overpayment under the proposed or

final rule. MMS has determined that the

procedures set forth in the proposed or

final rule do not violate E.O. 12630.

III. Summary of Final Rule

This final rulemaking codifies MMS’

longstanding policy with respect to

recoupment of overpayments made by

lessees and other royalty payors on

Indian mineral leases by the addition of

new sections at 30 CFR 218.53

(previously reserved) and 30 CFR

218.203. Overpayments subject to

recoupment under the adopted rule

include all payments made in excess of

the required payment for royalty, rental,

bonus, or other amounts owed as

specified by statute, regulation, order, or

terms of an Indian mineral lease.

The final rule permits lessees and

payors to recoup overpayments as

credits against reported revenues due to

Indian tribes or allottees in the current

month on the same lease. Specifically,

the final rule allows recoupment of

overpayments not to exceed 50 percent

of reported revenues in that month on

an allotted lease or 100 percent of the

reported revenues in that month on a

tribal lease. A payor may recoup an

overpayment made on one tribal lease

from a different tribal lease only if

written permission is authorized by

tribal statute or resolution.

The final rule also provides that MMS

may issue an order to a payor

prohibiting recoupment of any amount

for a reasonable period of time as MMS

may need to review the nature and

amount of any overpayment. Situations

may arise in which a payor believes it

has made an overpayment and is

entitled to recoup the overpaid amount.

However, the payor in fact may not have

overpaid, and should not be allowed to

recoup since recoupments reduce the

Indian lessor’s expected revenues. The

authority in paragraph (d) of both

§ 218.53 and § 218.203 allows MMS to

prevent the payor from taking the

recoupment until the fact that the payor

has overpaid and the amount of the
Federal Register / Vol. 60, No. 9 / Friday, January 13, 1995 / Rules and Regulations 3087

overpayment have been reviewed. MMS

expects to use this authority only in

limited circumstances, such as when

there is information suggesting there has

been no overpayment, or where the

proposed recoupment would be

extraordinarily large and result in

reduced revenues for a long period of

time to the Indian lessor.

IV. Procedural Matters

The Regulatory Flexibility Act

The Department 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.).

The rule is needed to conform

regulations to existing policy and

practice.

Executive Order 12630

The Department certifies that the rule

does not represent a governmental

action capable of interference with

constitutionally protected property

rights. Thus, a Takings Implication

Assessment need not be prepared under

Executive Order 12630, ‘‘Government

Action and Interference with

Constitutionally protected Property

Rights.’’

Executive Order 12778

The Department has certified to the

Office of Management and Budget that

these final regulations meet the

applicable standards provided in

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

Order 12778.

Executive Order 12866

This document has been reviewed

under Executive Order 12866 and is not

a significant regulatory action.

Paperwork Reduction Act of 1980

The collections of information

contained in this rule have been

approved by the Office of Management

and Budget under 44 U.S.C. 3501 et seq.

and assigned clearance number 1010–

0022.

National Environmental Policy Act of

1969

We have determined that this

rulemaking is not a major Federal action

significantly affecting the quality of the

human environment, and a detailed

statement under section 102(2)(C) of the

National Environmental Policy Act of

1969 [42 U.S.C. 4332(2)(C)] is not

required.

List of Subjects in 30 CFR Part 218

Coal, Continental shelf, Electronic

funds transfers, Geothermal energy,

Government contracts, Indian lands,

Mineral royalties, Natural gas, Penalties,

Petroleum, Public lands-mineral

resources, Reporting and recordkeeping

requirements.

Dated: November 28, 1994.

Bob Armstrong,

Assistant Secretary—Land and Minerals

Management.

For the reasons set out in the

preamble, 30 CFR part 218 is amended

as set forth below:

PART 218—COLLECTION OF

ROYALTIES, RENTALS, BONUSES

AND OTHER MONIES DUE THE

FEDERAL GOVERNMENT

1. The authority citation for Part 218

continues to read as follows:

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

396 et seq., 396a et seq., 25 U.S.C. 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., and 1801 et seq.

2. Section 218.53 (previously

reserved) under Subpart B (Oil and Gas,

General) is added to read as follows:

§ 218.53 Recoupment of overpayments on

Indian mineral leases.

(a) Whenever an overpayment is made

under an Indian oil and gas lease, a

payor may recoup the overpayment

through a recoupment on Form MMS–

2014 against the current month’s

royalties or other revenues owed on the

same lease. However, for any month a

payor may not recoup more than 50

percent of the royalties or other

revenues owed in that month under an

individual allotted lease or more than

100 percent of the royalties or other

revenues owed in that month under a

tribal lease.

(b) With written permission

authorized by tribal statute or

resolution, a payor may recoup an

overpayment against royalties or other

revenues owed in that month under

other leases for which that tribe is the

lessor. A copy of the tribe’s written

permission must be furnished to MMS

pursuant to instructions for reporting

recoupments in the MMS ‘‘Oil and Gas

Payor Handbook.’’ See 30 CFR 210.53.

Recouping overpayments on one

allotted lease from royalties paid to

another allotted lease is specifically

prohibited.

(c) Overpayments subject to

recoupment under this section include

all payments made in excess of the

required payment for royalty, rental,

bonus, or other amounts owed as

specified by statute, regulation, order, or

terms of an Indian mineral lease.

(d) The MMS Director or his/her

designee may order any payor to not

recoup any amount for such reasonable

period of time as may be necessary for

MMS to review the nature and amount

of any claimed overpayment.

3. A new § 218.203 under Subpart E

(Solid Minerals, General) is added to

read as follows:

§ 218.203 Recoupment of overpayments

on Indian mineral leases.

(a) Whenever an overpayment is made

under an Indian solid mineral lease, a

payor may recoup the overpayment

through a recoupment on Form MMS–

2014 against the current month’s

royalties or other revenues owed on the

same lease. However, for any month a

payor may not recoup more than 50

percent of the royalties or other

revenues owed in that month under an

individual allotted lease or more than

100 percent of the royalties or other

revenues owed in that month under a

tribal lease.

(b) With written permission

authorized by tribal statute or

resolution, a payor may recoup an

overpayment against royalties or other

revenues owed in that month under

other leases for which that tribe is the

lessor. A copy of the tribe’s written

permission must be furnished to MMS

pursuant to instructions for reporting

recoupments in the ‘‘AFS Payor

Handbook—Solid Minerals.’’ See 30

CFR 210.204. Recouping overpayments

on one allotted lease from royalties paid

to another allotted lease is specifically

prohibited.

(c) Overpayments subject to

recoupment under this section include

all payments made in excess of the

required payment for royalty, rental,

bonus, or other amounts owed as

specified by statute, regulation, order, or

terms of an Indian mineral lease.

(d) The MMS Director or his/her

designee may order any payor to not

recoup any amount for such reasonable

period of time as may be necessary for

MMS to review the nature and amount

of any claimed overpayment.

[FR Doc. 95–854 Filed 1–12–95; 8:45 am]

BILLING CODE 4310–MR–M

DEPARTMENT OF DEFENSE

Defense Logistics Agency

32 CFR Part 323

[Defense Logistics Agency Reg. 5400.21]

Privacy Act; Implementation

AGENCY: Defense Logistics Agency, DoD.

ACTION: Final rule.

SUMMARY: The Defense Logistics Agency

adopts an exemption to a system of