82 FR 11823 - Postponement of Effectiveness of the Consolidated Federal Oil & Gas and Federal & Indian Coal Valuation Reform 2017 Valuation Rule
DEPARTMENT OF THE INTERIOR
Office of Natural Resources Revenue Federal Register Volume 82, Issue 37 (February 27, 2017)
Office of Natural Resources Revenue
Federal Register Volume 82, Issue 37 (February 27, 2017)
| Page Range | 11823-11824 | |
| FR Document | 2017-03861 |
[Federal Register Volume 82, Number 37 (Monday, February 27, 2017)] [Rules and Regulations] [Pages 11823-11824] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-03861] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF THE INTERIOR Office of Natural Resources Revenue 30 CFR Parts 1202 and 1206 [Docket No. ONRR-2012-0004; DS63644000 DR2000000.CH7000 178D0102R2] RIN 1012-AA13 Postponement of Effectiveness of the Consolidated Federal Oil & Gas and Federal & Indian Coal Valuation Reform 2017 Valuation Rule AGENCY: Office of Natural Resources Revenue (ONRR), Interior. ACTION: Notification; postponement of effectiveness. ----------------------------------------------------------------------- SUMMARY: On July 1, 2016, the Office of Natural Resources Revenue (ONRR) published the Consolidated Federal Oil & Gas and Federal & Indian Coal Valuation Final Rule (2017 Valuation Rule or Rule) in the Federal Register. On December 29, 2016, three separate petitions challenging the 2017 Valuation Rule were filed in the United States District Court for the District of Wyoming. In light of the existence and potential consequences of the pending litigation, ONRR has concluded that justice requires it to postpone the effectiveness of the 2017 Valuation Rule pursuant to 5 U.S.C. 705 of the Administrative Procedure Act, pending judicial review. DATES: February 27, 2017. FOR FURTHER INFORMATION CONTACT: Peter Christnacht, Royalty Valuation team B, at 303-231-3651 or email to [email protected]. SUPPLEMENTARY INFORMATION: On July 1, 2016, ONRR published the 2017 Valuation Rule in the Federal Register. See 81 FR 43338. The 2017 Valuation Rule changes how lessees value their production for royalty purposes and revises revenue-reporting requirements. Although the 2017 Valuation Rule took effect on January 1, 2017, Federal and Indian Lessees are not required to report and pay royalties under the Rule until February 28, 2017. Under this notification, Lessees will not be required to report and pay royalties under the Rule as of that date. On December 29, 2016, three separate petitions were filed in the U.S. District Court for the District of Wyoming.\1\ The petitions allege that certain provisions of the 2017 Valuation Rule are arbitrary, capricious, and contrary to the law. On February 17, 2017, the petitioners sent the ONRR Director a letter requesting that ONRR postpone the implementation of the 2017 Valuation Rule. The petitioners claim that lessees affected by the Rule face significant hardship and uncertainty in the face of reporting under the rule for the first time on February 28, 2017. The petitioners also claim that the new reporting and payment requirements in the Rule are difficult, and in some cases impossible, to comply with by the royalty reporting deadline; a difficulty exacerbated by the fact that non-compliant lessees may be exposed to significant civil penalties. --------------------------------------------------------------------------- \1\ Cloud Peak Energy, Inc. v. United States Dep't of the Interior, Case No. 16CV315-F (D. Wyo.); American Petroleum Inst. V. United States Dep't of the Interior, Case No. 16CV316-F (D. Wyo.); Tri-State Generation and transmission Ass'n, Inc., Basin Electric Power Cooperative, and Western Fuels- Wyoming, Inc., v. United States Dep't of the Interior, Case No. 16CV319-F (D. Wyo.) --------------------------------------------------------------------------- Under Section 705 of the Administrative Procedure Act ``[w]hen an agency finds that justice so requires, it may postpone the effective date of action taken by it, pending judicial review.'' 5 U.S.C. 705. In light of the pending litigation, and for the following reasons, ONRR has concluded that justice requires it to postpone the effectiveness of the 2017 Valuation Rule until the judicial challenges to the Rule are resolved. First, the postponement will preserve the regulatory status quo while the litigation is pending and the Court decides whether to uphold the regulation. While ONRR believes the 2017 Valuation Rule was properly promulgated, the petitioners have raised serious questions concerning the validity of certain provisions of the Rule, including the expansion of the ``default provision'' and the use of the sales price of electricity for certain coal-royalty valuations. Given this legal uncertainty, maintaining the status quo is critical for a number of reasons. First, a postponement will avoid the substantial cost of retroactively correcting and verifying all revenue reports if the 2017 Valuation Rule is invalidated, in whole or in part, as a result of the pending litigation. Federal and Indian lessees affected by the 2017 Valuation Rule submit approximately 450,000 reporting lines every production month. If the Court invalidates the 2017 Valuation Rule, affected lessees would be forced to correct and resubmit reporting lines for each production month that the Rule is in effect. ONRR would be required to review and verify the same. Thus, postponing the 2017 Valuation Rule will avoid forcing both the regulated community and ONRR to perform the complicated, time-consuming, and costly task of correcting and verifying revenue reports and payments if the 2017 Valuation Rule is invalidated as a result of the pending litigation.\2\ --------------------------------------------------------------------------- \2\ Some lessees have likely converted their accounting systems to report and pay royalties under the new rule. While these lessees will incur a cost to revert back to the pre-existing system, the cost of doing so now, before the first reporting period, will be much less than if the reversion is required later upon judicial order, and the lessee is required to correct its reporting for each month it reported under the Rule. --------------------------------------------------------------------------- In addition, the postponement will enhance the lessees' ability to timely and accurately report and pay royalties because they will be using a well-known system that has been in place for the last 25 years. ONRR has received numerous legitimate questions from lessees on how to apply the 2017 Valuation Rule, some of which will require additional consideration and time before ONRR can definitively answer them; thus increasing the likelihood that lessees will initially report incorrectly and later need to adjust their reports. In addition, the Court may resolve some of these issues differently than ONRR, again increasing the likelihood that lessees will need to submit corrected reports. Given these judicial and administrative uncertainties, relying on the previous regulatory system while the litigation is pending will reduce uncertainty and enhance ONRR's ability to collect and verify natural resource revenues, which is in the best interest of all those who benefit from royalty payments, including States, Tribes, individual Indian lessors, and the general public. The United States will suffer no significant harm from postponing the effectiveness of the 2017 Valuation Rule while the litigation is pending. As noted in the preamble to the final rule, the implementation of the Rule is not expected to have a significant impact on [[Page 11824]] the economy. 81 FR 43338, 43368. Thus, postponing the effectiveness of the Rule will not cause any appreciable economic harm to the general public. In fact, the interests of all royalty beneficiaries will be enhanced by the regulatory certainty provided by the postponement, as discussed above. In contrast, the regulated community will suffer harm without the postponement, especially if the Rule is later invalidated by the Court. If the Rule is invalidated, the regulated community would not only incur the unreimbursable costs of reverting back to the old system, but would also incur the substantial costs of correcting its reports and royalty payments for each production month. In sum, in light of the existence and consequences of the pending litigation, and given the potentially irreparable harm that could result if the 2017 Valuation Rule is immediately implemented, ONRR has determined that the public interest and justice requires postponing the effectiveness of the 2017 Valuation Rule until the litigation is resolved. Accordingly, pursuant to Section 705 of the Administrative Procedure Act, 5 U.S.C. 705, ONRR has postponed the effectiveness of the Consolidated Federal Oil & Gas and Federal & Indian Coal Valuation Final Rule pending judicial review. Dated: February 22, 2017. Gregory J. Gould, Director, Office of Natural Resources Revenue. [FR Doc. 2017-03861 Filed 2-24-17; 8:45 am] BILLING CODE P
![Federal Register / Vol. 82, No. 37 / Monday, February 27, 2017 / Rules and Regulations 11823
effective September 15, 2016, is See 81 FR 43338. The 2017 Valuation is critical for a number of reasons. First,
amended as follows: Rule changes how lessees value their a postponement will avoid the
Paragraph 6005 Class E Airspace Areas
production for royalty purposes and substantial cost of retroactively
Extending Upward From 700 Feet or More revises revenue-reporting requirements. correcting and verifying all revenue
Above the Surface of the Earth. Although the 2017 Valuation Rule took reports if the 2017 Valuation Rule is
effect on January 1, 2017, Federal and invalidated, in whole or in part, as a
* * * * *
Indian Lessees are not required to report result of the pending litigation. Federal
AGL SD E5 Wessington Springs, SD [New] and pay royalties under the Rule until and Indian lessees affected by the 2017
Wessington Springs Airport, SD February 28, 2017. Under this Valuation Rule submit approximately
(Lat. 44°03′43″ N., long. 098°31′56″ W.) notification, Lessees will not be 450,000 reporting lines every
That airspace extending upward from 700 required to report and pay royalties production month. If the Court
feet above the surface within a 6.5-mile under the Rule as of that date. invalidates the 2017 Valuation Rule,
radius of Wessington Springs Airport On December 29, 2016, three separate affected lessees would be forced to
Issued in Fort Worth, Texas, on February petitions were filed in the U.S. District correct and resubmit reporting lines for
9, 2017. Court for the District of Wyoming.1 The each production month that the Rule is
Vonnie L. Royal, petitions allege that certain provisions in effect. ONRR would be required to
Acting Manager, Operations Support Group,
of the 2017 Valuation Rule are arbitrary, review and verify the same. Thus,
ATO Central Service Center. capricious, and contrary to the law. On postponing the 2017 Valuation Rule will
[FR Doc. 2017–03543 Filed 2–24–17; 8:45 am]
February 17, 2017, the petitioners sent avoid forcing both the regulated
the ONRR Director a letter requesting community and ONRR to perform the
BILLING CODE 4910–13–P
that ONRR postpone the complicated, time-consuming, and
implementation of the 2017 Valuation costly task of correcting and verifying
Rule. The petitioners claim that lessees revenue reports and payments if the
DEPARTMENT OF THE INTERIOR affected by the Rule face significant 2017 Valuation Rule is invalidated as a
hardship and uncertainty in the face of result of the pending litigation.2
Office of Natural Resources Revenue reporting under the rule for the first In addition, the postponement will
time on February 28, 2017. The enhance the lessees’ ability to timely
30 CFR Parts 1202 and 1206 petitioners also claim that the new and accurately report and pay royalties
[Docket No. ONRR–2012–0004; DS63644000 reporting and payment requirements in because they will be using a well-known
DR2000000.CH7000 178D0102R2] the Rule are difficult, and in some cases system that has been in place for the last
impossible, to comply with by the 25 years. ONRR has received numerous
RIN 1012–AA13
royalty reporting deadline; a difficulty legitimate questions from lessees on
Postponement of Effectiveness of the exacerbated by the fact that non- how to apply the 2017 Valuation Rule,
Consolidated Federal Oil & Gas and compliant lessees may be exposed to some of which will require additional
Federal & Indian Coal Valuation significant civil penalties. consideration and time before ONRR
Reform 2017 Valuation Rule Under Section 705 of the can definitively answer them; thus
Administrative Procedure Act ‘‘[w]hen increasing the likelihood that lessees
AGENCY: Office of Natural Resources an agency finds that justice so requires, will initially report incorrectly and later
Revenue (ONRR), Interior. it may postpone the effective date of need to adjust their reports. In addition,
ACTION: Notification; postponement of action taken by it, pending judicial the Court may resolve some of these
effectiveness. review.’’ 5 U.S.C. 705. In light of the issues differently than ONRR, again
pending litigation, and for the following increasing the likelihood that lessees
SUMMARY: On July 1, 2016, the Office of reasons, ONRR has concluded that will need to submit corrected reports.
Natural Resources Revenue (ONRR) justice requires it to postpone the Given these judicial and administrative
published the Consolidated Federal Oil effectiveness of the 2017 Valuation Rule uncertainties, relying on the previous
& Gas and Federal & Indian Coal until the judicial challenges to the Rule regulatory system while the litigation is
Valuation Final Rule (2017 Valuation are resolved. pending will reduce uncertainty and
Rule or Rule) in the Federal Register. First, the postponement will preserve enhance ONRR’s ability to collect and
On December 29, 2016, three separate the regulatory status quo while the verify natural resource revenues, which
petitions challenging the 2017 Valuation litigation is pending and the Court is in the best interest of all those who
Rule were filed in the United States decides whether to uphold the benefit from royalty payments,
District Court for the District of regulation. While ONRR believes the including States, Tribes, individual
Wyoming. In light of the existence and 2017 Valuation Rule was properly Indian lessors, and the general public.
potential consequences of the pending promulgated, the petitioners have raised The United States will suffer no
litigation, ONRR has concluded that serious questions concerning the significant harm from postponing the
justice requires it to postpone the validity of certain provisions of the effectiveness of the 2017 Valuation Rule
effectiveness of the 2017 Valuation Rule Rule, including the expansion of the while the litigation is pending. As noted
pursuant to 5 U.S.C. 705 of the ‘‘default provision’’ and the use of the in the preamble to the final rule, the
Administrative Procedure Act, pending sales price of electricity for certain coal- implementation of the Rule is not
judicial review. royalty valuations. Given this legal expected to have a significant impact on
DATES: February 27, 2017. uncertainty, maintaining the status quo
sradovich on DSK3GMQ082PROD with RULES
2 Some lessees have likely converted their
FOR FURTHER INFORMATION CONTACT: 1 Cloud Peak Energy, Inc. v. United States Dep’t accounting systems to report and pay royalties
Peter Christnacht, Royalty Valuation of the Interior, Case No. 16CV315–F (D. Wyo.); under the new rule. While these lessees will incur
team B, at 303–231–3651 or email to American Petroleum Inst. V. United States Dep’t a cost to revert back to the pre-existing system, the
peter.christnacht@onrr.gov. of the Interior, Case No. 16CV316–F (D. Wyo.); Tri- cost of doing so now, before the first reporting
State Generation and transmission Ass’n, Inc., period, will be much less than if the reversion is
SUPPLEMENTARY INFORMATION: On July 1,
Basin Electric Power Cooperative, and Western required later upon judicial order, and the lessee is
2016, ONRR published the 2017 Fuels-Wyoming, Inc., v. United States Dep’t of the required to correct its reporting for each month it
Valuation Rule in the Federal Register. Interior, Case No. 16CV319–F (D. Wyo.) reported under the Rule.
VerDate Sep<11>2014 16:46 Feb 24, 2017 Jkt 241001 PO 00000 Frm 00035 Fmt 4700 Sfmt 4700 E:\FR\FM\27FER1.SGM 27FER1](https://thefederalregister.org/doc/82_FR_11860/page/1.svg)
![11824 Federal Register / Vol. 82, No. 37 / Monday, February 27, 2017 / Rules and Regulations
the economy. 81 FR 43338, 43368. Thus, Federal Register announcing OMB Number of Respondents and
postponing the effectiveness of the Rule approval and the effective date of the Responses: 80 respondents; 80
will not cause any appreciable rules. responses.
economic harm to the general public. In DATES: The rule amendments to 47 CFR Estimated Time per Response: 1 hour.
fact, the interests of all royalty 80.233, 80.1061, 95.1402 and 95.1403, Frequency of Response: Third party
beneficiaries will be enhanced by the published at 81 FR 90739, December 15, disclosure requirement and on-occasion
regulatory certainty provided by the 2016, are effective on February 27, 2017. reporting requirement.
postponement, as discussed above. In Obligation to Respond: Required to
FOR FURTHER INFORMATION CONTACT:
contrast, the regulated community will obtain or retain benefits. The statutory
Cathy Williams by email at
suffer harm without the postponement, authority for this collection of
Cathy.Williams@fcc.gov and telephone
especially if the Rule is later invalidated information is contained in 47 U.S.C.
at (202) 418–2918.
by the Court. If the Rule is invalidated, 154, 303 unless otherwise noted.
the regulated community would not SUPPLEMENTARY INFORMATION: This
Total Annual Burden: 80 hours.
only incur the unreimbursable costs of document announces that, on February
Total Annual Cost: No cost.
reverting back to the old system, but 13, 2017, OMB approved information
Nature and Extent of Confidentiality:
would also incur the substantial costs of collection requirements contained in the
There is no need for confidentiality with
correcting its reports and royalty Commission’s Report and Order, FCC
this collection of information.
payments for each production month. 16–119, published at 81 FR 90739. The
Privacy Act Impact Assessment: No
In sum, in light of the existence and OMB Control Number is 3060–1227.
impact(s).
consequences of the pending litigation, The Commission publishes this notice
Needs and Uses: The information
and given the potentially irreparable as an announcement of the effective
collections contained in these rule
harm that could result if the 2017 date of those information collection
sections require manufacturers of
Valuation Rule is immediately requirements.
certain emergency radio beacons to
implemented, ONRR has determined Synopsis include supplemental information with
that the public interest and justice their equipment certification
As required by the Paperwork
requires postponing the effectiveness of application which are due to the
Reduction Act of 1995 (44 U.S.C. 3507),
the 2017 Valuation Rule until the information collection requirements
the FCC is notifying the public that it
litigation is resolved. which were adopted by the Federal
Accordingly, pursuant to Section 705 received OMB approval on February 13,
2017, for the information collection Communications Commission in FCC
of the Administrative Procedure Act, 5 16–119 on August 30, 2016.
U.S.C. 705, ONRR has postponed the requirements contained in 47 CFR
80.233, 80.1061, 95.1402, 95.1403, as Manufacturers of Automatic
effectiveness of the Consolidated Identification System Search and
Federal Oil & Gas and Federal & Indian amended in the Commission’s Report
and Order, FCC 16–119. Under 5 CFR Rescue Transmitters (AIS–SARTS), 406
Coal Valuation Final Rule pending MHz Emergency Position Indicating
judicial review. part 1320, an agency may not conduct
or sponsor a collection of information RadioBeacons (EPIRBs), and Maritime
Dated: February 22, 2017. unless it displays a current, valid OMB Survivor Locating Device (MSLDs) must
Gregory J. Gould, Control Number. No person shall be provide a copy of letter from the U.S.
Director, Office of Natural Resources subject to any penalty for failing to Coast Guard stating their device satisfies
Revenue. comply with a collection of information technical requirements specified in the
[FR Doc. 2017–03861 Filed 2–24–17; 8:45 am] subject to the Paperwork Reduction Act IEC 61097–17 technical standard for
BILLING CODE P that does not display a current, valid AIS–SARTs, or Radio Technical
OMB Control Number. The OMB Commission for Maritime Services
Control Number is 3060–1227. (RTCM) Standard 11000 for 406 MHz
The foregoing notice is required by EPIRBs, or RTCM Standard 11901 for
FEDERAL COMMUNICATIONS
the Paperwork Reduction Act of 1995, MSLDs. They must also provide a copy
COMMISSION
Public Law 104–13, October 1, 1995, or the technical test data, and the
47 CFR Parts 80 and 95 and 44 U.S.C. 3507. instruction manual(s). For 406 MHz
The total annual reporting burdens PLBs manufacturers must include
[WT Docket No. 14–36; FCC 16–119] documentation from COSPAS/SARSAT
and costs for the respondents are as
follows: recognized test facility that the PLB
Marine Radio Equipment and Related
OMB Control Number: 3060–1227. satisfies the technical requirements
Matters
OMB Approval Date: February 13, specified in COSPAS–SARSAT
AGENCY: Federal Communications 2017. Standard C/S T.001 and COSPAS–
Commission. OMB Expiration Date: February 29, SARSAT Standard C/S T.007 standards
ACTION: Final rule; announcement of 2020. and documentation from an
effective date. Title: Sections 80.233, Technical independent test facility stating that the
Requirements for Automatic PLB complies RTCM Standard 11010.2.
SUMMARY: In this document, the Federal Identification System Search and The information is used by
Communications Commission Rescue Transmitter (AIS–SART) Telecommunications Certification
(Commission) announces that the Office Equipment, 80.1061, Special Bodies (TCBs) to determine if the
of Management and Budget (OMB) has requirements for 406.0–406.1 MHz devices meets the necessary
sradovich on DSK3GMQ082PROD with RULES
approved, for a period of three years, EPIRB Stations, 95.1402, Special international technical standards and
information collection requirements Requirements for 406 MHz PLBs and insure compliance with applicable
adopted in the Commission’s Report 95.1403, Special Requirements for rules. If this information were not
and Order, FCC 16–119. This document Maritime Survivor Locating Devices. available, operation of marine safety
is consistent with the Report and Order, Form Number: N/A. equipment could be hindered
which stated that the Commission Respondents: Business or other for- threatening the ability of rescue
would publish a document in the profit entities. personnel to locate vessels in distress.
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Document Created: 2017-02-25 01:05:40
Document Modified: 2017-02-25 01:05:40
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Notification; postponement of effectiveness. | |
| Dates | February 27, 2017. | |
| Contact | Peter Christnacht, Royalty Valuation team B, at 303-231-3651 or email to [email protected] | |
| FR Citation | 82 FR 11823 | |
| RIN Number | 1012-AA13 | |
| CFR Citation | 30
CFR
1202 30 CFR 1206 |
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