[Federal Register Volume 62, Number 77 (Tuesday, April 22, 1997)]
[Rules and Regulations]
[Pages 19497-19499]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-10388]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service

30 CFR Part 218

RIN 1010-AC01


Amendments to Regulations Governing Collection of Royalties, 
Rentals, Bonuses, and Other Monies Due the Federal Government

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Final rulemaking.

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SUMMARY: MMS is amending its regulations that specify how payments are 
made for mineral lease royalties, rentals, and bonuses. The changes are 
needed to incorporate revised U.S. Treasury requirements. Also, MMS has 
clarified language for other parts of this regulation.

DATES: Effective date May 22, 1997.

FOR FURTHER INFORMATION CONTACT: David S. Guzy, Chief, Rules and 
Procedures Staff, phone (303) 231-3432, FAX (303) 231-3194, e-Mail 
David__G[email protected].

SUPPLEMENTARY INFORMATION: The principal authors of this rule are David 
J. Menard of the Reports and Financial Division, Financial Branch, Jim 
McNamee of the Office of Policy and Management Improvement, and David 
S. Guzy of the Rules and Procedures Staff, Lakewood, Colorado.

I. Background

    The purpose of this final rule is to comply with the U.S. 
Treasury's final rule amending 31 CFR Part 206, Management of Federal 
Agency Receipts, Disbursements, and Operation of the Cash Management 
Improvement Fund (59 FR 4536, 1/31/94). That rule requires executive 
agencies to use effective, efficient disbursement mechanics, 
principally Electronic Funds Transfer (EFT), in making their payments. 
That rule also requires executive agencies to use EFT for collecting 
funds.
    MMS has written this rule in plain English.

II. Comments on Proposed Rule

    MMS published a proposed rule on April 19, 1996, at 61 FR 17267. 
The proposed rulemaking provided for a 60-day comment period, which 
ended June 18, 1996, and was extended to July 19, 1996, by a Federal 
Register Notice (61 FR 28829, June 6, 1996).

General Comments

    Commenters believe writing the rule in plain English improves 
clarity and makes the rule easier to understand. Commenters stated they 
will continue to work with MMS to identify the most efficient and 
practical way to make payments to MMS.
    Response. We appreciate these comments and will continue the plain 
English concept in all future rulemakings.

Specific Comments

    Comment on Sec. 218.51(a). One commenter did not think it is 
necessary to define person or payment when used in their common or 
ordinary meaning.
    Response. MMS has determined that these definitions lend clarity 
and conform with other MMS rules. No change will be made in the final 
rule.
    Comment on Sec. 218.51(b). The same commenter pointed out that the 
word general was misspelled.
    Response. We will correct the spelling in the final rule.
    Comment on Sec. 218.51(b)(1). Five commenters responded as follows:
    (1) The section is vague and arbitrary. Sentence is circular and 
describes a discretionary standard. As written, the payer must use EFT 
anytime MMS requires EFT regardless of the reasoning or criteria or 
basis for the decision. They suggested alternative language.
    (2) The requirement is in conflict with the preamble. Their opinion 
is that making all payments by EFT is neither cost effective nor 
practicable. They said many Indian payments cost more to process than 
the invoice they are paying and adding the cost of making these 
payments by EFT would not be cost effective. They recommend a threshold 
of $10,000.
    (3) They feel there is a conflict with Sec. 218.51(b) which says 
``to the extent it is cost effective and practicable,'' and this 
section which says if instructed you must pay by EFT. They recommend a 
threshold of $10,000.
    (4) They feel the statement of ``If MMS instructs you to use * * 
*.'' conflicts with the general spirit of the preamble. They feel the 
additional cost of making EFT payments is not justifiable from the 
company standpoint. They recommend the $10,000 limit be maintained.
    (5) They do not believe the additional cost of making EFT payments 
is justifiable from the company standpoint. They recommend retaining 
the current $10,000 threshold.
    Response. MMS does not intend to be arbitrary in implementing the 
Treasury EFT requirement. The Treasury rule does not allow for any type 
of stated threshold. Our elimination of the threshold is based on 
Treasury's requirement that we increase our efficiency in collecting 
Government monies. We feel the new rule is consistent with the Treasury 
rule.
    We are aware of the cost and technical issues associated with 
making EFT payments. The U.S. Treasury is working with the banking 
industry to broaden the use of EFT. MMS believes our record of working 
with payors in implementing EFT has not been arbitrary or burdensome. 
It has not been our policy nor will it be our policy to unduly burden 
industry with EFT payment requirements. As EFT becomes more widespread, 
the cost should decrease; therefore, EFT will be more beneficial to 
industry and the Government.
    Comment on Sec. 218.51(b)(3). One commenter stated that the 
paragraph is confusing and should be rewritten to clearly define 
intent. The commenter asked two questions: (1) ``Does this statement 
mean that separate reports or report lines are required? (2) Are 
separate checks or separate lines on the check stub or other payment 
document needed?''
    Response. The intent of this paragraph is to emphasize the fact 
that you must not mix Federal and Indian lease payments on a payment 
document. In other words, you must not include any Indian lease 
payments in your Federal payment documents or any Federal lease 
payments in your Indian payment documents. This proposed rule deals 
only with payments and does not change any reporting requirements.

[[Page 19498]]

    Comment on Sec. 218.51(b)(5). One commenter recommended adding the 
word document to the end of the sentence.
    Response. We do not believe the suggested change adds to or 
clarifies the sentence.
    Comment on Sec. 218.51(c)(2). One commenter thought the word ``it'' 
was vague and open to more than one interpretation and that the 
sentence contained repetitive statements. They suggested alternative 
language.
    Response. Because this word was not clear in its meaning, we 
replaced the word ``it'' with the words ``your payment.''
    Comment on Sec. 218.51(c)(4). One commenter pointed out that the 
proposed wording does not agree with Sec. 218.51(d)(1) which says use 
the address supplied by a tribe. Section 218.51(c)(4) says to use 
address supplied by MMS.
    Response. MMS agrees that the proposed rule is not consistent on 
the source of the address. There may be instances where the tribe will 
change banks or have to change the lockbox address. MMS intends to 
notify payors of this change as promptly as possible, but you may 
receive your first notification from the tribe. The lockbox agreements 
are with the tribes and their banks and payors should follow the 
tribe's instructions for a lockbox address. We will change 
Sec. 218.51(d)(1) to eliminate the inconsistency.
    Comment on Sec. 218.51(f). One commenter felt that the word 
document should be added to the end of the first sentence.
    Response. We do not believe the suggested change adds to or 
clarifies the sentence.
    Comment on Sec. 218.51 (e) through (g). One commenter pointed out 
that the first sentence repeats what is in the title. The commenter 
felt that any address change for courier deliveries would require a 
rulemaking because the address is included in the regulation. The 
commenter also suggested using declarative sentences for (c), (f), and 
(g).
    Comment on Sec. 218.51(f)(3)(ii). One commenter stated that the 
section has been oversimplified; similarly, paragraphs (f) and (g) have 
been oversimplified. The commenter recommends alternative language.
    Comment on Sec. 218.51(f)(4)(iii). One commenter recommended 
rewriting the paragraph to improve clarity.
    Response. MMS agrees and reworded the paragraphs for clarification 
in the final rule. As to the comment on a change of address requiring a 
rulemaking, no policy nor procedure would be affected since MMS can 
notify payors of an address change outside of the rulemaking process.
    Comment on Sec. 218.51(g)(3). One commenter stated that an entity 
is responsible for its own actions and a payor should not be 
responsible for banks' actions.
    Response. MMS does and will continue to hold the payor responsible 
for the actions of your agent for making accurate and timely payments 
on your behalf.

III. 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 comply with U.S. Treasury requirements.

Executive Order 12630

    The Department certifies that the rule is not a governmental action 
capable of interference with constitutionally protected property 
rights. Thus, a Takings Implication Assessment need not be prepared 
under Executive Order 12630, ``Governmental Actions and Interference 
with Constitutionally Protected Property Rights.''

Executive Order 12988

    The Department has certified to the Office of Management and Budget 
that these proposed regulations meet the applicable standards provided 
in section 2(a) and (b)(2) of Executive Order 12988.

Executive Order 12866

    This document has been reviewed under Executive Order 12866 and is 
not a significant regulatory action.

Paperwork Reduction Act

    The rule has been examined under the Paperwork Reduction Act of 
1995 and has been found to contain no new reporting and information 
collection requirements.

Unfunded Mandate Reform Act of 1995

    The Department has determined and certifies according to the 
Unfunded Mandates Reform Act, 2 U.S.C. 1502 et seq., that this rule 
will not impose a cost of $100 million or more in any given year on 
State, local, and tribal governments, or the private sector.

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, Oil and 
gas exploration, Public lands--mineral resources.

    Dated: April 14, 1997.
Bob Armstrong,
Assistant Secretary--Land and Minerals Management.

    For the reasons set out in the preamble, 30 CFR Part 218 is amended 
as follows:

PART 218--COLLECTION OF ROYALTIES, RENTALS, BONUSES AND OTHER 
MONIES DUE THE FEDERAL GOVERNMENT

    1. The authority citation for part 218 is revised to read as 
follows:

    Authority: 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.A. 3335; 43 U.S.C. 1301 et seq. 1331 et seq., 1801 et seq.

    2. Section 218.51 is revised to read as follows:


Sec. 218.51  How to make payments.

    (a) Definitions.
    ACH--Automated Clearing House. A type of EFT using the ACH network.
    Courtesy Notice--An MMS-issued notice of rental or bonus due.
    Deferred Bonus Payment--Lease bonus paid in equal annual 
installments over a specified number of years.
    EFT--Electronic Funds Transfer. Any paperless transfer of funds a 
bank initiates through an electronic terminal. For MMS purposes, EFT is 
limited to FEDWIRE and ACH transfers.
    FEDWIRE--A type of EFT using the Federal Reserve Wire network.
    Invoice Document Identification--The MMS-assigned invoice document 
identification (four alpha and eight numeric characters).
    Payment--Any monies for royalty, bonus, rental, late payment 
charge, assessment, penalty, or other money sent to MMS.
    Person--Any individual, firm, corporation, association, 
partnership, consortium, or joint venture (when established as a 
separate entity). The term does not include Federal agencies.
    Report--Form MMS-2014, Report of Sales and Royalty Remittance.
    RIK--Royalty in kind.
    (b) General Instructions. You must make all payments to MMS

[[Page 19499]]

electronically to the extent it is cost effective and practical. If you 
pay money to MMS or to an Indian tribe or allottee, you must follow 
these procedures:
    (1) If MMS instructs you to use EFT, you must use EFT for all 
payments to MMS and/or a tribe.
    (2) Contact MMS before using EFT. MMS will provide you with EFT 
payment instructions.
    (3) Separate any payments on a Federal lease from any payments on 
an Indian lease.
    (4) If you are not required to use EFT, use one of the following 
types of payment documents. MMS prefers that you use these payment 
documents in the order presented:
    (i) Commercial check drawn on a solvent bank;
    (ii) Certified check;
    (iii) Cashier's check;
    (iv) Money order;
    (v) Bank draft drawn on a solvent bank; or
    (vi) Federal Reserve check.
    (5) You must include your payor code on all payments.
    (6) You must pay in U.S. dollars.
    (c) How to complete a non-EFT payment. (1) Make any payment on a 
Federal lease payable to: ``Department of the Interior-Minerals 
Management Service'' or ``DOI-MMS.''
    (2) For an Indian allottee payment, send a separate payment for 
each Bureau of Indian Affairs (BIA) agency or area office represented 
by the leases on your report or invoice document. You must include the 
name of the applicable BIA agency or area office on your payment. Make 
your payment document payable to: ``Department of the Interior-Minerals 
Management Service for BIA [Name] Agency (allotted)'' or ``DOI-MMS for 
BIA [Name] Agency (allotted).''
    (3) For an Indian tribal payment other than a lockbox payment, send 
a separate payment for each tribe represented by the leases on your 
report or invoice document. You must include the name of the Indian 
tribe on your payment. Make it payable to: ``Department of the 
Interior-Minerals Management Service for BIA [Name of Tribe]'' or 
``DOI-MMS for BIA [Name of Tribe].''
    (4) For an Indian tribal lockbox payment, follow the instructions 
MMS provides you on how to report and make the lockbox payment. These 
instructions are specific to each tribe's lockbox written agreement 
with the bank authorized to receive payments on the tribe's mineral 
leases. You will receive these instructions from MMS when you are 
required to use a tribal lockbox for reports and payments.
    (d) Where to send a non-EFT payment when you use the U.S. Postal 
Service. (1) For a payment to an Indian tribal lockbox, send your 
payment to the appropriate tribal lockbox address.
    (2) For a Federal nonproducing lease rental or deferred bonus 
payment, send it to:

    Minerals Management Service, Royalty Management Program, P.O. 
Box 5640, Denver, CO 80217-5640.

    (3) For all other Federal and Indian lease payments other than 
those going to an Indian tribal lockbox, send them to:

    Minerals Management Service, Royalty Management Program, P.O. 
Box 5810, Denver, CO 80217-5810.

    (e) Where to send a non-EFT payment when you use a courier or 
overnight delivery service. You should send this type of payment to:

    Minerals Management Service, Royalty Management Program, 
Building 85, Denver Federal Center, Room A-212, Denver, CO 80225-
0165.
    (f) How to prepare and what to include on your payment document. 
(1) For Form MMS-2014 payments, you must include both your payor code 
(block 2) and your payor-assigned document number (block 3a).
    (2) For invoice payments, including RIK invoice payments, you must 
include both your payor code and invoice document identification (four-
letter prefix and eight-digit number).
    (3) For bonus payments:
    (i) For one-fifth bonus payments for offshore oil, gas, and sulphur 
leases, follow the instructions in the Notice of Lease Offering.
    (ii) For payment of the four-fifths bonus for an offshore lease, 
use EFT and follow the instructions in Sec. 218.155(c).
    (iii) For the successful bidder's bonus in the competitive sale of 
a coal, geothermal, or offshore mineral (other than oil, gas or sulfur) 
lease, follow the instructions and terms of the Notice of Competitive 
Lease Sale.
    (iv) For installment payments of deferred bonuses, you must use 
EFT.
    (4) If you are paying a lease rental you must:
    (i) See 30 CFR 218.155(c) for instructions on how to pay first-year 
rentals of an offshore oil, gas, or sulfur lease; (ii) See the Notice 
of Lease Offering for instructions on how to pay first-year rentals 
other than those covered in paragraph (f)(4)(i) of this section.
    (iii) Include the MMS Courtesy Notice, when provided, or write your 
payor code and government-assigned lease number on the payment document 
when paying a rental that is not reported on Form MMS-2014 and not paid 
by EFT.
    (g) When is a payment to MMS due? (1) All payments are due to MMS 
at the time law, regulation, or lease terms require unless MMS approves 
a change according to 30 CFR 243.2, ``Suspensions of orders or 
decisions pending appeal.'' If you file an appeal, and the requirement 
to submit payment is suspended, the original payment due date for 
purposes such as calculating late payment interest is not changed.
    (2) If you use the U.S. Postal Service, courier, or overnight mail 
to send your payment, it is due at the MMS addresses in paragraphs (d) 
and (e) of this section before 4 p.m. Mountain Time on the due date, 
regardless of when you sent it.
    (3) If you use EFT to send your payment, it is due in the MMS 
account by the payment due date. You are responsible for your actions 
or your bank's actions that cause a late or incorrect payment. You will 
not be held responsible for mechanical or system failures of EFT 
payments.
    (h) What happens if payments are late or overdue?
     (1) If MMS receives your payment late, MMS will impose a late-
payment interest charge under 30 CFR 218.54.
    (2) If you do not pay an amount you owe, MMS may assess civil 
penalties under 30 CFR 241.20 and 241.51 or other applicable 
regulations.
    3. Paragraph (b)(1) of Sec. 218.155 is amended by revising the last 
sentence to read as follows:


Sec. 218.155  Method of payment.

* * * * *
    (b)(1) * * * EFT may be used as a method of payment for the one-
fifth bonus bid amount.
* * * * *
[FR Doc. 97-10388 Filed 4-21-97; 8:45 am]
BILLING CODE 4310-MR-P