[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