Page:United States Statutes at Large Volume 101 Part 3.djvu/421

 PUBLIC LAW 100-234—JAN. 6, 1988

101 STAT. 1719

Public Law 100- 234 100th Congress An Act To provide for adjustments of royalty payments under certain Federal onshore and Indian oil and gas leases, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, (a) That this Act may be referred to as the "Notice to Lessees Numbered 5 Gas Royalty Act of 1987". (b) FINDINGS.—The Congress finds that— (1) effective on June 1, 1977, in Notice to Lessees and Operators of Federal and Indian Onshore Oil and Gas Leases Numbered 5 (NTL-5) (42 Fed. Reg. 22,610), the Secretary of the Interior established the method of calculating the amount of royalties to be paid to the United States on natural gas production from Federal and Indian oil and gas leases. (2) NTL-5 was a duly promulgated rule of the Department of the Interior within the meaning of the Administrative Procedure Act; (3) under the NTL-5 method of calculation, the base value for royalty purposes of certain gas production was the greater of the price received under the gas sales contract or the highest applicable ceiling rate then established by the Federal Power Commission. The applicable ceiling rate was subsequently interpreted to be the maximum lawful price established under the Natural Gas Policy Act of 1978 (15 U.S.C. 3301 et seq.); (4) although between 1982 and 1986 gas prices in many areas declined below the maximum lawful prices established under the Natural Gas Policy Act of 1978, the continued application of NTL-5 required some royalties to be paid on the basis of a ceiling rate higher than the market value for the gas; (5) effective August 1, 1986, the Secretary of the Interior modified the method of calculating certain future Federal and Indian gas royalty payments. This modification, published in the Federal Register on July 25, 1986 (51 Fed. Reg. 26,759) was a duly promulgated regulation of the Department of the Interior. The modification left the original provisions of NTL-5 in effect for gas sales prior to August 1, 1986, since the Secretary found that retroactive modification of NTL-5 would have resulted in inconsistent royalty enforcement and would have undermined the policy of strict compliance with lawful Federal royalty valuation rules and the need to ensure that Federal lessees and other payors rely upon rules until such time as the rules are lawfully changed (51 Fed. Reg. 26,759); (6) in January 1987, the Department of the Interior proposed to reconsider its position and proposed to modify NTL-5 retroactively; (7) there is a trust responsibility of the United States for the administration of Indian oil and gas resources as reaffirmed in

Jan. 6, 1988 [H.R. 3479] Notice to Lessees Numbered 5 Gas Royalty Act of 1987. Contracts.

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