[Federal Register Volume 60, Number 36 (Thursday, February 23, 1995)]
[Rules and Regulations]
[Pages 10030-10036]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-4416]
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DEPARTMENT OF THE INTERIOR
Bureau of Reclamation
43 CFR Part 426
[RIN 1006-AA33]
Administrative Fee Provision of the Acreage Limitation Rules and
Regulations
AGENCY: Bureau of Reclamation, Interior.
ACTION: Final rule.
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SUMMARY: The purposes of this rule are to improve compliance with the
form submission requirements of the Reclamation Reform Act of 1982
(RRA) and the Acreage Limitation Rules and Regulations in order to
ensure that irrigation water is delivered only to eligible landholders
(landowners and lessees), and to recoup administrative costs that the
Bureau of Reclamation (Reclamation) incurs due to noncompliance with
the RRA reporting requirements. The rule adds a section that imposes
fees on districts when they do not meet statutory and regulatory
requirements for submitting RRA forms.
EFFECTIVE DATE: March 27, 1995.
[[Page 10031]] FOR FURTHER INFORMATION CONTACT: Alonzo Knapp, Manager,
Reclamation Law, Contracts, and Repayment Office, Bureau of
Reclamation, Attention: D-5200, PO Box 25007, Denver, CO 80225,
Telephone: (303) 236-1061, extension 224.
SUPPLEMENTARY INFORMATION: The RRA limits the amount of owned land on
which a landholder can receive irrigation water and places a limit on
the amount of leased land that can receive such water at a subsidized
water rate. In order to ensure compliance with the ownership
limitations and the limitations on subsidies, certain statutory and
regulatory requirements must be met.
One of these requirements applies to all landholders whose
landholdings in districts subject to the acreage limitation provisions
total more than 40 acres. These landholders must complete RRA
certification or reporting forms before receiving irrigation water. The
forms must be completed annually and submitted to each district in
which the landholder receives irrigation water. Landholders must
disclose on the forms all the land they own and lease directly or
indirectly in Reclamation projects that are subject to the acreage
limitation provisions. The forms must be resubmitted whenever a
landholding change occurs. If a landholding does not change, a
verification form to that effect must be submitted each year.
While the RRA and the Acreage Limitation Rules and Regulations (43
CFR Part 426) set limits on the receipt of irrigation water and
establish requirements that must be met in order to receive such water,
the current rules do not address situations in which water has been
delivered to landholders who failed to meet all the requirements and
thus, were ineligible to receive the water. These situations were not
addressed because the RRA does not contemplate such deliveries.
Districts, rather than Reclamation, generally control the
deliveries of irrigation water to landholders. Under their contracts
with the United States, districts are legally obligated not to deliver
irrigation water to landholders who do not meet the eligibility
requirements of the RRA.
With respect to the form requirements discussed previously,
Sec. 426.10(k) specifically states that failure by landholders to
submit the required certification or reporting form(s) will result in
loss of eligibility to receive irrigation water. However, during its
water district reviews, Reclamation has found that in some instances,
districts have delivered irrigation water to landholders who had failed
to meet the form requirements and other requirements of the law and
rules.
In 1988, Reclamation adopted a compensation policy whereby full-
cost charges were assessed for irrigation water that had been delivered
to ineligible landholders. This policy is based on the legal theory of
conversion in that when irrigation water is delivered to ineligible
recipients, it is an unlawful conversion of the Government's property
interest in the water, and the Government is therefore entitled to be
compensated for the conversion. Since Reclamation cannot recover the
water that was delivered to the ineligible recipients, it has been
Reclamation's position that it is entitled to recover the value of its
property interest in that water and that the full-cost water rate
prescribed in the RRA is an appropriate measure of the water's value.
In 1993, Reclamation decided to review certain agency policies, one
of which was the full-cost compensation policy for RRA form violations.
The Commissioner of Reclamation asked the Department of the Interior's
Office of the Solicitor whether Reclamation is permitted to impose
charges other than full-cost compensation charges for such violations.
In a July 23, 1993, memorandum, the Associate Solicitor, Division of
Energy and Resources, advised the Commissioner that several laws ``* *
* authorize Reclamation to promulgate regulations necessary to carry
out its mission, including those which would assess fees. This means
that Reclamation may, by regulation, impose administrative fees or
other charges designed to recover the costs it incurs for processing
improperly submitted forms or for collecting forms from those who have
not submitted them.'' The Associate Solicitor further concluded that
``* * * Reclamation has considerable discretion in determining how to
calculate those costs, so long as the charges imposed bear a
demonstrable relationship to the costs incurred by the agency and have
the intended effect of improving compliance with the Act and achieving
congressional objectives.''
Based on the Associate Solicitor's conclusions, Reclamation decided
to amend the Acreage Limitation Rules and Regulations by adding a
provision to impose assessments to recover its administrative costs
when landholders do not comply with the RRA form requirements.
Reclamation notified the public of its intent in the Federal Register
(see 58 FR 59427) Nov. 9, 1993, and published the proposed rule at 59
FR 33251, June 28, 1994.
Summary of Amendment to the Rules
The amendment to the Acreage Limitation Rules and Regulations
provides that Reclamation will assess a district for administrative
costs when RRA forms are not submitted before receipt of irrigation
water. The assessment will be applied on a yearly basis in each
district for each landholder that failed to comply with the form
requirements. A district will also be assessed for administrative costs
when corrections to RRA forms are not provided within a 60-day grace
period. The assessment will be applied on a yearly basis for each
landholder for which corrected forms are not provided within the grace
period. These assessments for administrative costs will replace the
full-cost charges that Reclamation has assessed in the past for form
violations under its compensation policy. The administrative cost
assessments will not be subject to the underpayment interest component
set forth in Sec. 426.23.
The assessment for administrative costs shall be set periodically
on the basis of the average costs associated with performing activities
to address RRA form violations. The assessment reflects the average
direct and indirect costs incurred Reclamation-wide for: (1)
Communicating with district representatives or landholders to obtain
missing or corrected forms, (2) assisting landholders in completing
certification or reporting forms for the period of time they were not
in compliance with the form requirements, (3) performing onsite visits
to determine if irrigation water deliveries have been terminated to
landholders that failed to submit the required forms, and (4)
performing other activities necessary to address form violations.
Initially the amount of the assessment will be $260. The amount is
based on a review of the costs Reclamation incurred in 1991, 1992, and
1993 performing activities to address RRA form violations. The
assessment will be reviewed at least once every 5 years and, if needed,
will be adjusted to reflect new cost data.
As with other assessments, districts will be held responsible for
payment of the assessments because of their contractual obligation with
the United States. Charges collected through the imposition of
assessments for administrative costs will be credited to the general
fund of the Treasury as miscellaneous receipts.
Payment of the assessments set forth in the proposed rule does not
exempt districts and landholders from the form requirements of the RRA
or Acreage Limitation Rules and Regulations. [[Page 10032]] Districts
are not permitted to continue water deliveries to ineligible recipients
simply because they are willing to pay the assessments. Reclamation
will take all necessary actions to prevent the delivery of irrigation
water to ineligible land.
Comments About the Proposed Rule
During the public comment period from June 28, 1994, through August
29, 1994, Reclamation received 48 responses on the proposed rule. The
responses were submitted by or on behalf of 40 districts, 7 water user
associations, 5 landholders, one Federal agency, and one U. S.
Congressman.
Approximately 80 percent of the respondents either approved of the
proposed rule entirely or in part. Many of these respondents stated
that the administrative cost assessment will provide a reasonable and
equitable means for addressing RRA form violations and will be a vast
improvement over Reclamation's past policy of assessing compensation
charges for nonsubmission of RRA forms.
Approximately 20 percent of the respondents were opposed to the
rule, mainly because they think the administrative cost assessments are
unnecessary or excessive. Several respondents objected to the rule
because they do not think Reclamation has the legal authority to impose
such assessments.
General Comments
Following are the general comments received about the proposed rule
and our response to each:
Comment 1: Two respondents commented that the rule should make it
clear that the administrative cost assessment will be the sole economic
ramification for RRA form violations.
Response: The respondent's comment has not been accommodated
because we think such language would be superfluous. First, the main
purpose of the rule is to set forth the charges that will be assessed
in cases of RRA form violations, which it does. In addition, it was
stated previously in this preamble that the administrative cost
assessment will replace the compensation charges Reclamation previously
assessed for form violations. This statement clearly sets forth
Reclamation's intent with regard to assessments for form violations.
Comment 2: Four respondents commented that the rule should clearly
state that the administrative cost assessments will be applied
prospectively only.
Response: The rule will be applied prospectively. The rule will be
effective March 27, 1995. This date is printed at the beginning of this
preamble, under EFFECTIVE DATE. We do not think it is necessary to
repeat the effective date in the rule itself.
Comment 3: Nineteen respondents commented that the administrative
cost assessments should be applied retrospectively to past RRA form
violations instead of the compensation rate.
Response: As stated in the response to the preceding comment, the
rule will be applied prospectively. However, Reclamation is currently
considering a plan whereby issued and pending compensation bills for
RRA form violations would be reviewed using the dollar amount in
Sec. 426.24(e) as the basis for possible action.
Comment 4: One respondent commented that Reclamation needs to
define ``$260 per form violation'' and asked how many RRA forms are
required of a farmer in a single year.
Response: We assume the phrase the respondent is referring to is
from a statement in the preamble of the proposed rule. The complete
sentence reads as follows: ``The assessment for administrative costs is
initially set at $260 per form violation.'' The sentence in question is
a general statement, the main purpose of which was to make the reader
aware of the amount of the administrative cost assessment; i.e., $260.
Sections 426.24(a) and (b) describe how the assessment will be applied
to form nonsubmissions and form errors.
Regarding the respondent's question, a landholder generally needs
to submit just one RRA form annually; however, in some cases,
additional forms may be required. Regardless of the number of forms
required, the $260 assessment for forms nonsubmission will be based on
a landholder's entire RRA form effort for the water year in question,
for each district in which land is held. For example, if Landholder A
held land in District B and received irrigation water in 1995 despite
the fact that he/she submitted neither of two RRA forms required for
that water year, the assessment would be $260, not $520.
Comment 5: One respondent commented that the proposed rule did not
adequately comply with the Regulatory Flexibility Act because it did
not explain why the rule would not have a significant effect on a
substantial number of small entities.
Response: The explanatory language referred to by the respondent
has been added to the preamble of this final rule. By doing so,
Reclamation believes it is in full compliance with the requirements of
the Regulatory Flexibility Act.
Comment 6: Five respondents questioned Reclamation's authority to
impose administrative cost assessments. Several of the respondents
commented that the assessments are actually penalties, and since the
RRA does not include a penalty provision, the assessments cannot be
charged.
Response: Reclamation is authorized to promulgate regulations and
to collect all data necessary to carry out its mission. 43 U.S.C.
Sec. 373; 43 U.S.C. 390 ww(c); 31 U.S.C. Sec. 9701.
Reclamation determines eligibility to receive water, in large part,
based on the information provided on RRA certification and reporting
forms. Section 426.10(k) of the regulations requires that failure by
landholders to submit the required certification or reporting form(s)
will result in loss of eligibility to receive water.
In issuing the administrative fee rule, Reclamation has properly
exercised its authority to promulgate regulations for ensuring the
delivery of irrigation water only to eligible landholders. The fee is
intended to improve compliance with RRA certification requirements and
ensure that irrigation water is delivered only to those landholders
eligible under the RRA and to recoup certain administrative costs
Reclamation incurs due to noncompliance with RRA reporting
requirements.
Reclamation, as a Federal agency, also may impose remedial
measures. Courts have recognized an agency's authority to impose
measures if they reasonably relate to the purpose of the enabling
statute and further congressional objectives. Gold Kist, Inc. v.
Department, 741 F.2d 344, 348 (11th Cir. 1984); West v. Bergland, 611
F.2d 710, 725 (8th Cir. 1980); United States v. Frame, 885 F.2d 1119
(3d Cir. 1989).
The $260 charge provided for in this rule is an administrative fee
designed to improve compliance with the acreage limitation requirements
and to recover Reclamation's costs in helping landholders to meet the
eligibility requirements of the Act. As such, the fee is remedial in
nature rather than punitive.
In addition, Reclamation possesses authority to ``* * * prescribe
regulations establishing the charge for a service or thing of value
provided by the agency.'' 31 U.S.C. Sec. 9701. As discussed above,
under Reclamation law, any landholder who received irrigation water
prior to submitting the requisite certification forms failed to meet
the criteria which Congress established for eligibility. When
Reclamation becomes [[Page 10033]] aware of the violation and
undertakes a variety of additional activities to obtain the forms and
the necessary information, Reclamation is helping that landholder
establish eligibility for receiving the ``service or thing of value''--
irrigation water. Certainly, these additional Reclamation activities
are valuable services the agency provides districts and landholders who
would otherwise not be in compliance with applicable Federal laws,
regulations and contracts.
Finally, it should be noted that Reclamation's authority to
promulgate these regulations was not diminished by the court's decision
in Orange Cove Irrigation District v. United States, 28 Fed. Cl. 790
(1993). That case did not involve the issue of Reclamation's authority
to assess administrative fees or to issue rules. The plaintiff in that
case, Orange Cove Irrigation District (OCID), brought suit against the
United States to recover money it paid to Reclamation at the time OCID
renewed its water service contract in 1988. Reclamation had assessed
the district full-cost charges for water delivered in 1987 to certain
district landholders before they submitted RRA certification forms. On
August 12, 1993, the court rendered its decision in favor of OCID. The
case was resolved on the narrow issue of breach of contract and should
only be read in light of facts specific to that controversy.
Although not necessary to its holding, the Court also determined
that the assessment of full cost constituted an unauthorized penalty
under the facts of this case and that the United States had not
violated any notice and rulemaking requirements of the Administrative
Procedure Act.
Comment 7: Twenty-one respondents commented that the rule should
include a provision to increase the 40-acre exemption threshold for RRA
form requirements. Ten of the respondents suggested the threshold be
increased to 320 acres; six of them suggested a 160-acre threshold. The
remainder were not specific as to what the revised threshold should be.
Many of the respondents stated that an increased threshold would help
to decrease the cost and burden placed on districts and landholders and
yet provide adequate means for proper enforcement of the RRA. Several
respondents also stated that Reclamation ensured water users in the
past that the 40-acre threshold would be increased. One respondent
commented that the 40-acre threshold should not be reduced.
Response: As stated in the preamble to the proposed rule, the 40-
acre threshold issue is outside the scope of this rulemaking. This
rulemaking action was limited to administrative cost assessments in an
effort to expedite the process. Reclamation is currently engaged in a
rulemaking action in which we will review the Acreage Limitation Rules
and Regulations in their entirety. The exemption threshold will be
addressed in that rulemaking. The proposed rule for that rulemaking
action is scheduled to be published in February 1995.
Comment 8: One respondent asked why the Government tells
landholders the amount of land they may farm in order to make a living.
Response: The RRA does not limit the amount of land landholders may
farm. It does, however, limit the amount of owned land on which any one
landholder can receive irrigation water from Reclamation projects and
the amount of leased land that can receive such water at a rate that is
less than the full-cost rate. The reason for this is to ensure that the
benefits from the Reclamation program are widely distributed rather
than concentrated in the hands of a few landholders.
Specific Comments
The following comments refer to specific provisions within the
proposed rule and are followed by Reclamation's response to each.
Section 426.24(a)--Forms Submittal
Comment 1: Eleven respondents commented that the rule needs to
define the terms ``direct landholder'' and ``indirect landholder,'' as
used in Secs. 426.24(a) and (b). Several of the respondents stated that
the words ``direct'' and ``indirect'' should be deleted because the
term ``landholder'' is sufficient by itself.
Response: The terms ``direct landholder'' and ``indirect
landholder'' were included in the proposed rule so readers would be
aware that in applying the administrative cost assessment to legal
entities, Reclamation will treat compliance by an entity independently
from compliance by its part owners or beneficiaries. For example, if
three shareholders in a corporation submit their RRA forms, but the
entity and the remaining two shareholders do not, the administrative
cost assessment would be applied to the entity and each of the two
shareholders that were not in compliance, for a total of $780.
Reclamation has decided to clarify Secs. 426.24(a) and (b) by deleting
the words ``direct'' and ``indirect'' and adding a sentence to address
application of the administrative cost assessment when legal entities
are involved as described above.
Comment 2: One respondent commented that if an entity completes the
required RRA form, but one or more of the part owners does not, this
should be treated as a form correction and not failure to file a form.
Response: Part owners of legal entities are required to file forms
separately from those of the entities in which they have an interest.
The reason for this is that the acreage limitation entitlements and
other requirements of Reclamation law apply to part owners in the same
manner as they apply to any other landholder. Since the part owners may
own or lease land in addition to the land that is attributable to them
through interest in the entity, it is not sufficient for the entity's
form to be submitted in order to determine if all acreage limitation
entitlements have been met. Therefore, if a part owner does not submit
the required RRA forms, this is not viewed as a correctable error on
the part of the entity, but rather as nonsubmission of forms by the
part owner. Thus, in the case presented by the respondent, the $260
administrative cost assessment would be applied for each part owner
that received irrigation water without having submitted the required
forms. However, an additional assessment would not be applied as a
result of the entity's actions, because it was in compliance with the
RRA form requirements.
Comment 3: One respondent requested that the following statement in
the preamble to the June 28, 1994, proposed rule be clarified: ``A
district will be assessed for administrative costs when RRA forms are
not submitted prior to receipt of irrigation water.'' The respondent
questioned whether this statement referred to the receipt of irrigation
water to landowners or to the district.
Response: The statement refers to the receipt of irrigation water
by landholders subject to the RRA form requirements. We believe the
language in Sec. 426.24(a) is clear on this point; therefore, the rule
was not revised to accommodate the comment.
Section 426.24(b)--Forms Corrections
Comment 1: Four respondents commented about the 45-day grace period
provided for form corrections. One respondent thought landholders/
districts should be given a longer period of time in which to correct
RRA forms before imposition of the $260 assessment. Three of the
landholders thought the 45-day grace period was fair.
Response: This section has been revised to increase the length of
the grace period from 45 days to 60 days. [[Page 10034]] The grace
period was lengthened to account for any additional time districts and
landholders may need for mailing the forms in question. This section
was also revised to clarify that the 60-day grace period will be based
on calendar days rather than working days.
Comment 2: Three respondents commented that the $260 assessment for
administrative costs is excessive for cases where RRA forms are not
corrected.
Response: Reclamation believes the $260 assessment is reasonable to
cover the additional costs it incurs to obtain corrections on RRA
forms. In addition, any financial hardships can be avoided because the
assessment will not be applied if the corrected forms are submitted
within the 60-day grace period.
Comment 3: One respondent understood the provision to mean that
$260 would be assessed for every error Reclamation identified on an RRA
form.
Response: The assessment will be applied on a yearly basis for each
landholder for which corrected forms are not submitted within the grace
period. Therefore, if Landholder A did not submit timely corrections
for four errors on his 1995 forms, the assessment would be $260, not
$1,040. The application of the $260 assessment for form corrections is
explained in Sec. 426.24(b); therefore, no revisions were made to
accommodate this comment.
Comment 4: Three respondents commented that mistakes occur on RRA
forms because the forms are very complicated and are revised annually.
Therefore, they were opposed to assessments for form errors.
Response: The assessment for form corrections will not be applied
immediately when Reclamation identifies errors on landholder forms.
Landholders/districts have 60 days in which to submit corrected forms
before the $260 assessment will be charged. To the extent possible,
Reclamation is also willing to provide assistance if help is needed in
completing RRA forms. Because of the preceding, we find the rule to be
reasonable, even if the forms are perceived by some to be difficult to
complete.
Comment 5: Six respondents commented that the $260 assessment for
RRA form corrections should not be charged for inadvertent errors. Four
of the respondents thought the assessment was appropriate only in cases
involving fraud.
Response: Reclamation realizes that inadvertent errors will
sometimes be made on RRA forms. On the other hand, these errors cannot
be overlooked because complete and accurate information is needed in
order to determine if a landholder is within applicable entitlements
and meets other requirements of the RRA. Section 426.24(b) resolves
both the potential for inadvertent errors and the need for accurate
information by providing landholders a 60-day grace period in which to
submit corrected forms before imposition of the $260 assessment. This
assessment is not appropriate in cases involving fraud because the
consequences for fraudulent actions are set forth in 18 U.S.C. 1001.
These consequences, as related to the RRA forms, are discussed in
Sec. 426.10(j).
Comment 6: Two respondents did not think the assessment would help
reduce the number of RRA form problems. One of the respondents thought
the assessment would only cause antagonism. The other respondent stated
that the fee would be too high in cases where the errors were
inadvertent and too low in cases of fraud.
Response: Reclamation believes the assessment will provide an
equitable method for addressing errors on RRA forms while recovering
the incremental costs it incurs to address such problems. We also think
the assessment is reasonable, and in most cases, will provide an
incentive for landholders and districts to complete their forms
properly in future water years. The applicability of the administrative
cost assessment to fraudulent actions is discussed in the response to
the preceding comment.
Comment 7: Three respondents maintained that the assessment for RRA
form corrections should not be a flat fee, but should be based on the
severity of the error.
Response: All the information landholders are required to disclose
on the forms is needed for Reclamation to have adequate information to
determine if landholders are in compliance with the acreage limitations
and enforce other requirements of the RRA. Therefore, all omissions and
errors identified by Reclamation are considered to be of equal
severity. It must also be remembered that even in those cases where
errors are perceived to be insignificant, the $260 assessment will not
be charged if corrections are made within the grace period.
Comment 8: One respondent asked if the assessment for
administrative costs will be applied to RRA form errors as well as to
the nonsubmission of such forms.
Response: Section 426.24(a) provides for the imposition of the $260
administrative cost assessment in cases of form nonsubmission. Section
426.24(b) provides for the assessment in cases of form errors. However,
in the case of errors, the assessment will not be charged if corrected
forms are submitted within the grace period. The assessment in
Sec. 426.24(a) will be applied independently from the assessment in
Sec. 426.24(b). Sections 426.24(a) and (b) were revised to clarify this
point.
Comment 9: One respondent commented that the assessment for form
corrections should be applied to landholders for whom corrected forms
are not provided within the grace period only if irrigation water has
been received by the landholder.
Response: Reclamation agrees with this comment and Sec. 426.24(b)
has been revised accordingly. However, Reclamation will proceed to
prepare the bill for the administrative cost assessment after
expiration of the grace period. If the landholder did not in fact
receive irrigation water during the year in question, the district will
need to provide evidence to this effect before the assessment will be
retracted.
Section 426.24(c)--Parties Responsible for Paying Assessments
Comment 1: Twenty respondents disagreed with this provision. For
legal reasons and from the standpoint of equity, they think Reclamation
should collect the payment of administrative cost assessments from
landholders rather than districts.
Response: This comment has not been accommodated. Reclamation
contracts almost exclusively with districts rather than individual
water users. In general, districts agree in their contracts that the
delivery of irrigation water is subject to Reclamation law as amended
and supplemented. Based on the preceding, Reclamation will hold
districts ultimately responsible for payment of the administrative cost
assessments. However, Sec. 426.24(c) does not preclude districts from
collecting the assessments from the involved landholders.
Section 426.24(e)--Assessment for Administrative Costs
Comment 1: One respondent thought that it was unfair to impose the
same fee on all districts in every instance of noncompliance.
Response: The type of violations for which the assessments will be
charged are the same in all districts. Therefore, we believe it is fair
to establish Reclamation's average costs and impose the same assessment
westwide. In fact, landholders and districts have frequently requested
that such a uniform fee be established.
Comment 2: One respondent suggested that the bill for each
[[Page 10035]] landholder be based on an hourly rate that is consistent
Reclamationwide.
Response: This comment has not been accommodated. Reclamation
analyzed the costs it incurred in the past to address RRA form
violations and has determined it is fair and reasonable to charge an
average assessment that is uniform in all districts.
Comment 3: Two respondents commented that the $260 assessment does
not accurately reflect Reclamation's costs to bring landholders into
compliance because Reclamation only identifies the violations; the
district performs all the other work.
Response: Reclamation acknowledges that districts frequently take
actions to bring landholders into compliance. However, in most cases,
Reclamation also performs additional activities to address
noncompliance problems. Examples of such activities were listed
previously in this preamble. Districts may not be aware of these
activities because they are not always conducted at the site of the
district office.
Comment 4: One respondent did not think it was fair that
Reclamation can adjust the administrative cost assessment every 5 years
without input from the districts.
Response: The basic methodology for determining the assessment was
set forth in the proposed rule, which was open for public comment. The
methodology was explained again previously in this preamble. Since
adjustments will generally only be made to reflect new cost data and a
notice of the revised assessment will be published in the Federal
Register, we do not think another comment period is necessary before
the adjustments are made.
Comment 5: One respondent questioned whether the costs will
continually increase until they are equal to the compensation rate.
Response: Reclamation's goal is to establish fair and reasonable
charges to recover the costs it incurs to address RRA form violations.
The process will be reexamined should the assessments ever reach a
point where this goal can no longer be achieved.
Comment 6: One respondent commented that the administrative cost
assessment should not be based on 1991, 1992, and 1993 costs because
Reclamation keeps changing the RRA forms, which is confusing to
landholders.
Response: The changes that were made to the RRA forms during 1991,
1992, and 1993 were relatively minor. Reclamation finds no evidence to
support a conclusion that the noncompliance level increased because of
form revisions.
Comment 7: One respondent commented that the rule is too vague with
regard to the basis for the administrative cost assessment.
Response: Reclamation agrees that the rule does not provide a
detailed description of the basis for the administrative cost
assessment. However, it would be inappropriate to include the complete
cost analysis in either the rule or the preamble. In the final rule,
the description has been deleted from Sec. 426.24(e). However, it has
been retained in the preamble so readers will be aware of the general
basis for the $260 assessment.
Comment 8: One respondent wanted clarification as to whether the
administrative cost assessment is a combination of a penalty and costs
incurred by Reclamation.
Response: The assessment is based strictly on Reclamation's costs
and is remedial in nature. It does not include a penalty factor.
Comment 9: One respondent commented that overhead costs should not
be included in the administrative cost assessment.
Response: Reclamation thinks it is reasonable to recover all
additional costs incurred to address RRA form violations. Overhead
costs are part of these costs; therefore, they have been included in
the assessment.
Comment 10: One respondent commented that the administrative cost
assessment should not include the cost of Reclamation's audits, because
that is the Government's job.
Response: The assessment does not include costs for reviewing a
district's compliance with the RRA or audits of individuals. It
includes only those additional costs Reclamation incurs to address RRA
form violations after they have been found.
Comment 11: One respondent commented that some districts are not
always able to terminate deliveries of irrigation water to just those
landholders that have not submitted the required RRA forms. The reason
for this is that several landholders, some of whom may be in
compliance, are located on the same ditch with the same delivery point.
Response: Despite the circumstances described by the respondent,
districts are not permitted to deliver irrigation water to landholders
that are not in compliance with the RRA form requirements. In the case
described, districts may need to take extra measures to encourage all
landholders located on the same ditch to submit the required forms. To
the extent possible, Reclamation will work with districts to help
resolve such situations.
Comment 12: Two respondents stated that Reclamation is not
permitted to terminate water deliveries in cases where landholders fail
to submit the required forms. The respondents maintain that landholders
must first be provided with a notice or hearing before such deliveries
can be terminated.
Response: These comments were not accommodated. Reclamation
believes it is permitted to terminate water deliveries in such cases
because: (1) Pursuant to the requirements in Secs. 206, 224(c), and 228
of the RRA and Sec. 426.10(e) of the Acreage Limitation Rules and
Regulations, landholders are required to submit RRA forms as a
condition for receipt of irrigation water. (2) The consequence for
noncompliance with this requirement has been clearly set forth in
Sec. 426.10(k) since the Acreage Limitation Rules and Regulations were
first promulgated in 1983. That is, failure to submit the required
forms results in loss of eligibility to receive irrigation water by the
landholder.
As stated previously, Reclamation is currently engaged in a
rulemaking action in which we will review the Acreage Limitation Rules
and Regulations in their entirety. As part of that rulemaking action,
we will consider the comment regarding notices or hearings prior to
termination of water deliveries.
Executive Order 12866
This rule does not constitute a significant regulatory action under
Executive Order 12866, and therefore does not require review by the
Office of Management and Budget.
National Environmental Policy Act
Neither an environmental assessment nor an environmental impact
statement is required for this rulemaking because, pursuant to 40 CFR
1508.4 and Departmental Manual part 516 DM 6, Appendix 9, Sec. 9.4.A.1,
this action is categorically excluded from the provisions of the
National Environmental Policy Act.
Paperwork Reduction Act
The information collection requirements contained in this rule have
been approved by the Office of Management and Budget as is required by
44 U.S.C. 3501 et seq. and assigned clearance numbers 1006-0005 and
1006-0006.
Small Entity Flexibility Analysis
Reclamation identified approximately 500 landholders with RRA form
violations during the 1990, 1991, and [[Page 10036]] 1992 water years.
This represents 1.1 percent of the 45,000 landholders subject to the
RRA form requirements and 0.2 percent of the 230,000 landholders in
districts subject to the RRA. The violations were found in 60 different
districts, which is approximately 20 percent of the districts subject
to the ownership and full-cost pricing provisions of the RRA and about
10 percent of the total districts that have entered contracts with the
United States for receipt of irrigation water.
The administrative cost assessment of $260 will in most cases be
less than the full-cost charges that Reclamation previously assessed
for RRA form violations pursuant to its compensation policy. Therefore,
in comparison, the assessment will generally have a positive economic
effect on most landholders and districts involved with form violations.
Based on the preceding, Reclamation has certified that the rule
will not have a significant economic effect on a substantial number of
small entities. Small entities also are able to avoid all negative
effects by complying with the form requirements of the RRA and Acreage
Limitation Rules and Regulations.
Civil Justice Reform
The Department of the Interior has certified to the Office of
Management and Budget that this proposed rule meets the applicable
standards provided in sections 2(a) and 2(b)(2) of Executive Order
12778.
Authorship
This proposed rule was prepared by staff in the Reclamation Law,
Contracts, and Repayment Office, D-5200, Bureau of Reclamation, Denver,
Colorado.
List of Subjects in 43 CFR Part 426
Administrative practice and procedure, Irrigation, Reclamation,
Reporting and recordkeeping requirements.
For the reasons stated in the preamble, 43 CFR Part 426 is amended
as follows:
Dated: January 11, 1995.
Elizabeth Ann Rieke,
Assistant Secretary--Water and Science.
PART 426--RULES AND REGULATIONS FOR PROJECTS GOVERNED BY FEDERAL
RECLAMATION LAW
1. The authority citation for Part 426 is revised to read as
follows:
Authority: 43 U.S.C. 371-383; 43 U.S.C. 390aa-390zz-1; 31 U.S.C.
9701.
2. Section 426.24 is redesignated as Sec. 426.25, and new section
426.24 is added to read as follows:
Sec. 426.24 Assessments of administrative costs.
(a) Forms submittal. A district will be assessed for the
administrative costs described in paragraph (e) of this section when
irrigation water has been delivered to landholders that did not submit
certification or reporting forms before receiving irrigation water in
accordance with Sec. 426.10(e). The assessment will be applied on a
yearly basis in each district for each landholder that received
irrigation water but failed to comply with Sec. 426.10(e). In applying
the assessment to legal entities, compliance by an entity will be
treated independently from compliance by its part owners or
beneficiaries. The assessment in this paragraph will be applied
independently of the assessment set forth in paragraph (b) of this
section.
(b) Forms corrections. Where corrections are needed on
certification or reporting forms, the requirements of Sec. 426.10(a)
will be deemed to have been met so long as the district provides
corrected forms to Reclamation within 60 calendar days of the date of
Reclamation's written request for corrections. A district will be
assessed for the administrative costs described in paragraph (e) of
this section when corrected forms are not provided within this 60-day
time period. The assessment will be applied on a yearly basis in each
district for each landholder that received irrigation water and for
whom corrected forms are not provided within the applicable 60-day time
period. In applying the assessment to legal entities, compliance by an
entity will be treated independently from compliance by its part owners
or beneficiaries. The assessment in this paragraph will be applied
independently of the assessment set forth in paragraph (a) of this
section.
(c) Parties responsible for paying assessments. Districts shall be
responsible for payment of the assessments described in paragraphs (a)
and (b) of this section.
(d) Disposition of assessments. The administrative costs assessed
and collected under paragraphs (a) and (b) of this section will be
deposited to the general fund of the United States Treasury as
miscellaneous receipts.
(e) Amount of assessment. The assessment for administrative costs
shall be set periodically on the basis of the average costs associated
with performing activities to address certification and reporting form
violations. Initially the amount shall be $260. This assessment for
administrative costs will be reviewed at least once every 5 years and
adjusted, if needed, to reflect new cost data. Notice of the revised
assessment for administrative costs will be published in the Federal
Register in December of the year the data is reviewed.
[FR Doc. 95-4416 Filed 2-22-95; 8:45 am]
BILLING CODE -94-P
