[Federal Register Volume 62, Number 142 (Thursday, July 24, 1997)]
[Rules and Regulations]
[Pages 39773-39775]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-19383]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service

30 CFR Parts 250 and 256

RIN 1010-AC04


Pipeline Right-of-Way Applications and Assignment Fees; 
Requirements for Filing of Lease Transfers

AGENCY: Minerals Management Service, Interior.

ACTION: Final rule.

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SUMMARY: The Minerals Management Service (MMS) amends its regulations 
governing the filing fees charged for processing pipeline right-of-way 
applications and assignments, and applications for approval of 
instruments of transfer of a lease or interest. This amendment 
increases the filing fees for these documents, which will allow MMS to 
recover the full processing costs.

EFFECTIVE DATE: September 22, 1997.

FOR FURTHER INFORMATION CONTACT: John Mirabella, Engineering and 
Operations Division, at (703) 787-1607.

SUPPLEMENTARY INFORMATION: MMS last increased the filing fees for 
pipeline right-of-way applications and assignments on April 1, 1988. At 
that time, the fee for a pipeline right-of-way application was 
increased to $1,400, and the fee for a pipeline right-of-way assignment 
was increased to $50. MMS has not changed the $25 filing fee for 
instruments of transfer of a lease or interest since the administration 
of regulations concerning Outer Continental Shelf (OCS) minerals and 
rights-of-way was transferred to MMS from the Bureau of Land Management 
in 1982.
    During the years since MMS last adjusted these filing fees, the 
costs to process these documents have increased. MMS conducted in-house 
cost analyses based on the costs of salaries and benefits, computer 
time, and overhead in each of the regional offices to determine the 
average processing cost for each of these documents. The results showed 
that MMS is undercharging for these services, and, therefore, MMS is 
increasing the fees.
    This rule increases the filing fee for a pipeline right-of-way 
application from $1,400 to $2,350; the filing fee for a pipeline right-
of-way assignment from $50 to $60; and the filing fee for instruments 
of transfer of a lease or an interest from $25 to $185.
    MMS published a notice of proposed rulemaking (NPRM) on August 11, 
1995 (60 FR 41034). We received eight comment letters responding to the 
proposed rule. The comments all opposed the increase in fees. The 
principal comments and MMS's responses are as follows:
    Comment: Commenters opposed the large increase in the fee for 
transfer of leases. They pointed out that the MMS had proposed an 
increase of 640 percent. Comments suggested a lesser increase based on 
the increase in the Consumer Price Index (CPI) or the increase in the 
Council of Petroleum Accountants Society's (COPAS) Wage Index. Others 
suggested a specific amount.
    Response: Under the Independent Offices Appropriation Act of 1952 
(IOAA), 31 U.S.C. 9701, and Department of the Interior (DOI) 
implementing policy, MMS is required to charge the full cost for 
services which provide special benefits or privileges to an 
identifiable non-Federal recipient above and beyond those which accrue 
to the public at large. We do not have the option of choosing to charge 
less.
    Comment: The bonus, royalty, and rental payments lessees make are 
more than sufficient to cover any fee increases that might be needed.
    Response: Bonus, royalty, and rental payments are compensation for 
the right to explore for, develop, and produce oil and gas on the 
lease. Fees covering pipeline rights-of-way applications or transfers 
and fees covering transfers of leases provide additional benefits not 
covered by bonus, royalty, and rental payments.
    Comment: MMS should improve its business practices and look to 
reduce costs internally before passing on costs to lessees.
    Response: MMS is continuously looking for ways to improve 
efficiency and lower costs. This increase reflects both the effects of 
inflation and the effects of added complexity of reviewing lease 
transfers. These added complexities result from necessary bond reviews.
    Comment: Establish a fee schedule for ``multiples'' of interests 
transferred when one lessee transfers a number of interests to another 
party (i.e., $X per 10 transfers). Also, establish a ceiling on the 
total cost for these types of ``bulk'' transfers.
    Response: The new fees are based on the total cost of reviewing and 
approving many applications and requests for transfers. The fee charged 
for each transaction is an average. If MMS were to set up a system 
allowing a lesser fee for simple transfers or ``bulk'' transfers, then 
the fee for others would need to be higher. MMS chose to charge the 
same fee for all transactions rather than a higher fee for some 
transactions and a lower fee for others. A variable fee structure would 
be difficult to administer and would add unnecessary administrative 
costs.
    Comment: MMS should not index the fees to the CPI. The commenter 
believed that with automatic increases in costs, MMS would not strive 
to control expenses or improve work efficiency, and lessees would be 
precluded from any future comment on fee increases. Others suggested 
the COPAS Wage Index as the appropriate choice of an index.
    Response: We kept the proposed provision to allow future automatic 
adjustments in the amount of the fee based on the CPI ``U''. We believe 
that a broader inflation index such as the CPI ``U'' is a better 
indicator of changes in MMS costs than the suggested COPAS Wage Index 
which specifically reflects costs in the petroleum industry. (Note: the 
CPI ``U'' refers to the CPI for all urban consumers.)
    However, in response to the comment, we revised the rule to allow 
MMS to increase the fee by a percentage equal to the percentage 
increase in MMS costs to process applications. MMS will attempt to 
minimize cost increases. The rule provides that if the percentage 
increase in MMS costs is greater than the percentage increase in the 
CPI ``U'', MMS will provide notice and opportunity for comment before 
changing the fee. Author: This document was prepared by John V. 
Mirabella, Engineering and Operations Division.

Executive Order (E.O.) 12866

    This rule is a significant rule under E.O. 12866 and has been 
reviewed by the Office of Management and Budget (OMB). MMS estimates 
that the rule will cost industry approximately $670,000 per year. This 
is based on the average number of applications, assignments, and 
transfers handled by the Regions in the past.

E.O. 12988

    DOI certified to OMB that this rule meets the applicable civil 
justice reform standards provided in sections 3(a) and 3(b)(2) of E.O. 
12988.

[[Page 39774]]

Unfunded Mandates Reform Act of 1995

    DOI 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.

Regulatory Flexibility Act

    DOI determined that this rule will not have a significant effect on 
a substantial number of small entities. The increase in fees charged by 
MMS is small relative to the cost of operating on the OCS. We expect 
that the increase in the fees will not affect the number of leases or 
pipelines that are transferred each year or the number of pipeline 
right-of-way applications requested each year.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) 
provides that an agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless it displays 
a currently valid OMB control number. Although OMB previously approved 
the collections of information required by these regulations prior to 
this revision, the amount of the filing fees was not subject to OMB 
review at the time the NPRM was published. Therefore, we did not submit 
the collections in the NPRM to OMB for review. However, under the new 
Paperwork Reduction Act, MMS is now required to obtain OMB approval as 
part of the final rulemaking process. The collections of information in 
this final rule remain unchanged from the proposed rule. Comments 
received on the NPRM are discussed earlier in the preamble. The 
applicable OMB control numbers for the information collections in this 
final rule are 1010-0050 (30 CFR 250.160 and 250.163) and 1010-0006 (30 
CFR 256.64). The information collection aspects of this final rule will 
not take effect until approved by OMB.
    MMS has submitted to OMB information collection packages for 30 CFR 
part 250, Subpart J, Pipelines and Pipeline Rights-of-Way, which 
includes the revised requirements in Secs. 250.160 and 250.163 (OMB 
control number 1010-0050); and 30 CFR part 256, Leasing of Sulphur or 
Oil and Gas in the Outer Continental Shelf, which includes the revised 
requirements in Sec. 256.64 (OMB control number 1010-0006). MMS invites 
the public and other Federal agencies to comment on the collections of 
information as discussed below. Send comments regarding any aspect of 
these collections to the Office of Information and Regulatory Affairs, 
OMB, Attention: Desk Officer for the Interior Department (1010-0050 or 
1010-0006), 725 17th Street NW., Washington, D.C. 20503. Send a copy of 
your comments to the Information Collection Clearance Officer, Minerals 
Management Service, 1849 C Street NW., MS 4230, Washington, D.C. 20240. 
OMB is required to make a decision concerning the collection of 
information contained in this final regulation between 30 and 60 days 
after publication of this document in the Federal Register. Therefore, 
your comments are best assured of being considered by OMB if OMB 
receives them by August 25, 1997.
    MMS collects the information under regulations implementing the OCS 
Lands Act, as amended. MMS uses the information to ensure the 
qualification of assignees and that assignees comply with all 
requirements for holding a pipeline right-of-way. The information 
required is mandatory and/or required to obtain or retain a benefit 
under 43 U.S.C. 1331 et seq. MMS will protect information considered 
confidential or proprietary under applicable law and under regulations 
at 30 CFR 250.18.
    The average reporting burden estimates currently approved by OMB 
for the individual sections revised by this rulemaking are: 140 hours 
per new right-of-way application (Sec. 250.160), 8 hours per assignment 
of right-of-way (Sec. 250.163), and 5 hours per application for 
approval of any instrument of transfer (Sec. 256.64). The total average 
burden estimates currently approved for OMB control number 1010-0050 
are 36 reporting hours and 20 recordkeeping hours. The total average 
burden estimate currently approved for OMB control number 1010-0006 is 
3.5 reporting hours. This includes the time for reviewing instructions, 
searching existing data sources, gathering and maintaining the data 
needed, and completing and reviewing the information collection. In 
addition to the hour burden, the application filing fees represent a 
cost burden to the respondents. MMS estimates the annual burdens for 
the application fees are: $246,750. (new right-of-way applications, 
Sec. 250.160), $4,560 (assignments of right-of-way, Sec. 250.163), and 
$420,875 (applications for approval of any instrument of transfer, 
Sec. 256.64).
    In calculating the burdens, MMS may have assumed that respondents 
perform some of the requirements and maintain records in the normal 
course of their activities. MMS considers these to be usual and 
customary. Commenters are invited to provide information if they 
disagree with this assumption and they should tell us what the burden 
hours and costs are that are imposed by this collection of information.
    (1) MMS specifically solicits comments on the following questions:
    (a) Is the proposed collection of information necessary for the 
proper performance of MMS's functions, and will it be useful?
    (b) Are the burden hours estimates reasonable for the proposed 
collection?
    (c) Do you have any suggestions that would enhance the quality, 
clarity, or usefulness of the information to be collected?
    (d) Is there a way to minimize the information collection burden on 
those who are to respond, including the use of appropriate automated 
electronic, mechanical, or other forms of information technology?
    (2) In addition, the Paperwork Reduction Act requires agencies to 
estimate the total annual cost burden to respondents or recordkeepers 
resulting from the collection of information. The MMS needs your 
comments on this item. Your response should split the cost estimate 
into two components:
    (a) Total capital and startup cost component and
    (b) Annual operation, maintenance, and purchase of services 
component. Your estimates should consider the costs to generate, 
maintain, and disclose or provide the information. You should describe 
the methods you use to estimate major cost factors, including system 
and technology acquisition, expected useful life of capital equipment, 
discount rate(s), and the period over which you incur costs. Capital 
and startup costs include, among other items, computers and software 
you purchase to prepare for collecting information; monitoring, 
sampling, drilling, and testing equipment; and record storage 
facilities. Generally, your estimates should not include equipment or 
services purchased: (i) Before October 1, 1995; (ii) to comply with 
requirements not associated with the information collection; (iii) for 
reasons other than to provide information or keep records for the 
Government; or (iv) as part of customary and usual business or private 
practices.

Takings Implication Assessment

    DOI determined that this rule does not represent a governmental 
action capable of interfering with constitutionally protected rights. 
Thus, DOI does not need to prepare a Takings Implication Assessment 
pursuant to E.O. 12630, Governmental Actions and Interference with 
Constitutionally Protected Property Rights.

[[Page 39775]]

National Environmental Policy Act

    DOI determined that this rule does not constitute a major Federal 
action significantly affecting the quality of the human environment; 
therefore, an Environmental Impact Statement is not required.

List of Subjects in 30 CFR Part 250

    Continental shelf, Environmental impact statements, Environmental 
protection, Government contracts, Incorporation by reference, 
Investigations, Mineral royalties, Oil and gas development and 
production, Oil and gas exploration, Oil and gas reserves, Penalties, 
Pipelines, Public lands--mineral resources, Public lands--rights-of-
way, Reporting and recordkeeping requirements, Sulphur development and 
production, Sulphur exploration, Surety bonds.

List of Subjects for 30 CFR Part 256

    Administrative practice and procedure, Continental shelf, 
Government contracts, Incorporation by reference, Oil and gas 
exploration, Public lands--mineral resources, Reporting and 
recordkeeping requirements, Surety bonds.

    Dated: May 9, 1997.
Bob Armstrong,
Assistant Secretary, Land and Minerals Management.

    For the reasons stated in the preamble, the Minerals Management 
Service (MMS) amends 30 CFR parts 250 and 256 as follows:

PART 250--OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER 
CONTINENTAL SHELF

    1. The authority citation for part 250 continues to read as 
follows:

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

    2. Section 250.160 is amended by revising the fifth sentence in 
paragraph (a) and adding three new sentences following the fifth 
sentence to read as follows:


Sec. 250.160  Applications for a pipeline right-of-way grant.

    (a) * * * A nonrefundable filing fee of $2,350 and the rental 
required under Sec. 250.159(c)(2) of this part must accompany a new 
right-of-way application. MMS periodically will amend the filing fee 
based on its experience with the costs for administering pipeline 
right-of-way applications. If the costs change by a percentage of not 
more than the percentage change in the CPI ``U'' since the last change 
to the filing fee, MMS will amend the application fee by the percentage 
of the change in costs without notice and opportunity for comment. If 
costs increase by a percentage more than the percentage change in the 
CPI ``U'' since the last change to the filing fee, MMS will provide 
notice and an opportunity to comment before it changes the filing fee. 
* * *
* * * * *
    3. Section 250.163 is amended by revising the last sentence in 
paragraph (b) and adding three new sentences following the last 
sentence to read as follows:


Sec. 250.163  Assignment of a right-of-way grant.

* * * * *
    (b) * * * A nonrefundable filing fee of $60 must accompany the 
application for the approval of an assignment. MMS periodically will 
amend the filing fee based on its experience with the costs for 
administering pipeline right-of-way assignment applications. If the 
costs increase by more than the CPI ``U,'' MMS will provide notice and 
opportunity for comment before changing the filing fee. For lesser cost 
increases or cost reductions MMS will change the fee without such 
procedures.

PART 256--LEASING OF SULPHUR OR OIL AND GAS IN THE OUTER 
CONTINENTAL SHELF

    4. The authority citation for part 256 continues to read as 
follows:

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

    5. Section 256.64 is amended by revising the first sentence in 
paragraph (a) (8) as redesignated at 62 FR 27959, May 22, 1997, 
effective August 20, 1997, and adding three new sentences following the 
first sentence to read as follows:


Sec. 256.64  Requirements for filing of transfers.

    (a) * * *
    (8) A nonrefundable filing fee of $185 must accompany an 
application for approval of any instrument of transfer required to be 
filed. MMS periodically will amend the filing fee based on its 
experience with the costs for administering lease transfer 
applications. If the costs increase by more than the CPI ``U,'' MMS 
will provide notice and opportunity for comment before changing the 
filing fee. For lesser cost increases or cost reductions MMS will 
change the fee without such procedures. * * *
* * * * *
[FR Doc. 97-19383 Filed 7-23-97; 8:45 am]
BILLING CODE 4310-MR-P