OPA

Interior Secretary James Watt today announced a major overhaul of the Interior Department's decades-old system for collecting mineral royalties, to assure recovery of an estimated $200 to $500 million a year in oil and gas royalties believed unreported on Federal and Indian leases.

Watt's decisions, requiring realigned management, tighter internal controls, more site inspectors, improved auditing, additional penalties, and greater cooperation with States and Indian tribes, were adopted to implement 60 recommendations of the Commission on Fiscal Accountability of the Nation's Energy Resources. Watt appointed the Commission last July to look into waste and fraud in the royalty program, which now provides approximately $5 billion a year for the Federal Treasury, mineral producing States and Indian tribes. Projections indicate that royalty collections will top $14 billion a year by 1990.

"I have directed the Department to move aggressively to achieve or exceed the goals of the Commission's recommendations," the Secretary said. "Orders were issued earlier this week and implementation is now under way."

The Secretary noted that studies conducted by the General Accounting Office, the Congress, State governments and the Indian communities dating back to 1959 revealed serious allegations of waste, fraud and mismanagement in the royalty collection program.

“Nevertheless,” he said, “I discovered on coming to the Department that very little had been done to resolve these problems. Today, to accomplish President Reagan's- goals of eliminating government waste while stimulating domestic energy production, we must and will assure that we receive full value from the sale of the public's oil, gas and other mineral resources.

"I have focused major attention of this Department upon the royalty management program involving the States and Indian tribes. Our efforts have renewed interest in the importance of the collection process but a comprehensive review such as that conducted by the Commission was vital, “said Watt. To provide improved management of the royalty system by increased Secretarial responsibility, Watt announced creation of a Minerals Management Service.

The U.S. Geological Survey's Conservation Division, will be reporting to a three-man Minerals Management Board directly responsible to the Secretary. The executive group chaired by Under Secretary Donald Paul Hodel will include Assistant Secretaries J. Robinson West {Policy, Budget and Administration) and Daniel Miller (Energy and Minerals).

"The new agency will have ready access to the Secretary and will require a high level of involvement and direction," Watt said. "The transfer of functions governing the administration of mineral leases away from the Geological Survey should strengthen that agency. Relieved of its regulatory duties, the Survey will be better able to carry out its prime responsibilities for scientific research and for gathering, analyzing and disseminating scientific information about the Nation's resources." '

Watt credited the Commission's six-month investigation, headed by David F. Linowes and including a panel of four nationally recognized fiscal, legal and scientific authorities, with having pinpointed major long-standing deficiencies in the royalty management process.

The Minerals Management Service, through new regulations, will require improved security on about 46,500 wells on 17,600 Federal leases. Operators will be required to develop site security plans and will face stiff penalties for violations. Federal monitoring will be intensified. States and tribes will be urged to cooperate in augmenting the work of an expanded inspection team.

"I am implementing a policy whereby we will enter into cooperative agreements with the States and tribes to augment much of the enforcement work now performed by the Geological Survey,” Watt said.

Watt agreed with a Commission proposal to create a Legislative Task Force which will develop an omnibus royalty management bill to be forwarded to Congress. The task force, to be headed by Theodore J. Garrish, Legislative Counsel to the Secretary, will consider legislative changes required to make States and Indian tribe’s equal partners in the collection program. Proposed also are penalties up to $10,000 a day for security and reporting violations, creation of a self-sustaining royalty management fund, adoption of a reward incentive plan for encouraging reports on fraud or mismanagement, and other improvements.

The Secretary also announced his intention to name an Advisory Commission composed of Federal, State and Indian representatives, to assist in implementing the Commission's recommendations and in improving the levels of cooperation among the various governments. The Linowes Commission had strongly urged creation of such a group.

The Secretary said a proposal by the Linowes Commission to raise the onshore minimum royalty rate from its present 12 1/2 percent to 16 2/3 percent (the current rate on most offshore and recent Indian leases) merits further study, which he ordered be conducted and completed by April 1.

The Department's Office of Inspector General was requested by Watt to report on a Commission recommendation to determine whether minerals sales could and should be traced beyond the first purchaser. The Commission had made that recommendation as a means by which the Department could independently verify information from producers, royalty payers and first purchasers.

The commission recommended that Interior conduct intensive "lookback audits" regarding the sufficiency of past royalty payments of the top 25 royalty payers. The Secretary reaffirmed his commitment to such audits and agreed that an analysis of ' 1 lookbacks 11 into the payments of two major producers, now under way, will guide the Department in deciding which additional lookbacks will be worthwhile and to speed their completion.

The USGS, meanwhile, has instituted major changes in auditing procedures as a result of its own investigations of irregularities, as well as a review by the Secretary early in 1981. The agency recently awarded contracts totaling $12.4 million for work over a multi-year period to support a more automated accounting system.

Growing problems in the system, spotlighted by earlier investigations and brought into focus by oil price increases, led Watt last February to advise governors of oil-producing States that he planned to modernize the royalty collection system.

In appointing the Commission in July, he urged it to use its independent authority to probe waste and fraud, asking that it report its findings directly to him within six months. The Commission conducted five hearings in Washington, New York and Denver, listening to scores of witnesses, while visiting a number of oil and gas lease sites in the Western States.

The Commission maintained coordination with the President's Council on Integrity and Efficiency, and the Office of Management and Budget. Besides Linowes, an international authority in management, the Commission members are Elmer B. Staats, former comptroller general of the United States; Michel T. Halbouty, renowned earth scientist and engineer; Charles J. Mankin, State Geologist of Oklahoma; and Mary Gardiner Jones, attorney and consumer affairs specialist.

The United States' top Indian official, Interior Assistant Secretary Ken Smith, told 350 Indian businessmen January 13 that Indian reservations need businesses that are "competent and competitive and are going to endure to provide jobs and services for the community… because they earn the money they make and they also earn respect".

Smith, addressing the Minority Business Contractors Association of North Dakota, stressed the importance to reservation communities of "well managed, soundly established Indian enterprises." He said the reservations do not need more government-funded make-work jobs.

A Wasco Indian who ran the very successful tribal enterprises of the Warm Springs Reservation in Oregon before coming to Washington, D.C., last year, Smith has consistently told Indian groups they must be less dependent on the Federal government. "We should use and develop our own resources, break our addiction to easy-come, easy-go Federal money and achieve real economic independence," Smith told the Indian contractors.

Smith said that he was seeking to establish a $10 million fund to be used to help tribes plan and carry out development ventures with private capital and in joint ventures with private industry. He said his plan would “provide Indians with up-front expert examination of ventures before capital is put at risk.” He said the Indians need to build a record of successes to bring back to 11 0MB and Congress if we hope to get additional funding of this kind.

"The Department of the Interior, Smith said, would continue to support and implement the provisions of the Indian preference policy and the Buy Indian Act, which permit the non-competitive awarding of government contracts to Indian firms. He added, however, that these laws "can never be an excuse for inferior or non-competitive performance."

Smith said the Indian businessmen had a special value and importance in the Indian community. "Though you are bearing the risks and the burdens as individuals, your success brings benefits to the whole Indian community." Members of the North Dakota Minority Contractors Association, he said, did more than $70 million in business in the past year.

Smith's itinerary included a visit to the Devils Lake Sioux Manufacturing Company on the Fort Totten Reservation in North Dakota and meetings at Aberdeen, South Dakota and Minneapolis, Minnesota, with Bureau of Indian Affairs area officials and with tribal leaders.

Interior Assistant Secretary Ken Smith today announced a major realignment of the Bureau of Indian Affairs' administrative structure. The changes, he said, will improve management efficiency, reduce personnel in central and area offices by 20 percent and reduce overhead costs by $16 million in fiscal year 1983.

Smith said the administrative cuts, coupled with an increase of $55 million in the Bureau of Indian Affairs' 1983 budget request, will result in increased funding of programs at the reservation level.

In the reorganization, the present 12 area offices will be replaced with six regional service centers. The Bureau's education office will be streamlined and the size of the central office reduced.

Smith said the six regional service centers will be at Albuquerque, New Mexico; Minneapolis, Minnesota; Oklahoma City, Oklahoma; Phoenix, Arizona; Portland, Oregon, and Rapid City, South Dakota. Smith added that plans for the immediate future also include a field office at Juneau, Alaska to serve the Alaska Natives and a Navajo Nation Service Center at Window Rock, Arizona.

In the realignment of the Bureau's education office, there will be regional field offices at Minneapolis, Oklahoma City, Phoenix and Portland. Each of these offices will be headed by an assistant education director with line authority and responsibility for education activities in his region. This plan complies with the mandates of Public Law 95-561, which stresses local community control of Indian schools under professional educators.

In the central office the education office will be consolidated into two divisions.

Smith said, "Indian leaders have repeatedly asked me to protect the funding for their reservation programs and to take needed budget cuts in administrative overhead. This is our response."

There will be continued discussion and consultation with tribal leaders, union officials and others in the implementation of the realignment, Smith said. He and other departmental officials this week briefed Indian leaders, Members of Congress, BIA field officials and employee union officials on the basic elements of the realignment.

Smith said the changes will cut red tape and costs and definitely improve the Bureau's management of Indian programs."

Further information about changes, Smith said, would be made available as implementation proceeds.

The Bureau now has area offices in Aberdeen, South Dakota; Albuquerque, New Mexico; Anadarko and Muskogee, Oklahoma; Billings, Montana; Juneau, Alaska; Minneapolis, Minnesota; Window Rock and Phoenix, Arizona; Portland, Oregon; Sacramento, California and Washington, D. C.

Interior Assistant Secretary Ken Smith announced today that the Bureau of Indian Affairs' Institute of American Indian Arts (IAIA) at Santa Fe, New Mexico would be funded and would continue operations for at least the next two years.

Smith told a gathering of Indian artists, in Washington for a special exhibition of Indian art at the Kennedy Center, that he had reaffirmed his "personal support for the Institute" which has suffered a serious decline in enrollment in recent years. Smith said he told the Institute President Jon Wade to build on the best traditions of the fine arts school, but also to take necessary steps toward sound and effective management.

The post-secondary Institute, established in 1962 as a fine arts high school, is now seeking accreditation as a junior college.

Smith told the artists, some of them IAIA alumni, that the school has been a valuable cultural asset to the Indian community. He said the Bureau's education officials would be working with the school staff to complete studies needed for planning long-term future of the school.

Interior Assistant Secretary Ken Smith has offered to continue the Bureau of Indian Affairs' operation of 21 village day schools in Alaska in 1982-83.

In a March 10 letter to Alaska Governor Jay Hammond, Smith offered two options, both of which included BIA operation of Mt. Edgecumbe boarding high school for one more year.

Option 1 called for the 1982 transfer of 16 of the 37 village day schools now operated by the BIA and the remaining 21 at the end of 1982-83 school year.

Option 2 would transfer all 37 village schools at the end of this school year, together with approximately $5.9 million that the Bureau would otherwise spend on the schools.

In 1963, the BIA and the state formalized an agreement for the transfer of BIA schools to state administration. There were at one time, as many as 120 BIA schools in Alaska. Transfers have occurred intermittently in the past 20 years. Smith is proposing that the transfer be completed no later than 1983.

BIA officials began negotiating last fall with state officials for the completion of the transfer. They also visited 36 of the 37 villages to discuss the proposed transfers with parents and village leaders. (One village was missed because of bad weather.)

Smith asked Governor Hammond to respond by March 30 if he wanted the BIA to continue operating the 21 village schools for one more year. He explained, "We must begin issuing employment contracts."

Concerning the costs of upgrading facilities involved in the transfers, Smith wrote: "we do not anticipate any funds to be made available to the State of Alaska for purposes of capital improvements. We do, however, intend to complete planned improvements to five schools in FY 1982 valued at $2.1 million. Three of these five projects involve schools scheduled for transfer this year."

Interior Assistant Secretary Ken Smith today appointed six provisional regional directors to a 30-day detail as part of the proposed major realignment of the Bureau of Indian Affairs.

In addition, he named four provisional Assistant Directors of Education for the same period to fill the proposed slots planned under the realignment of the Bureau's education division.

Smith said the new directors will continue the consultation process with tribal leaders on proposed future plans for the Bureau.

The six newly named provisional regional directors and the proposed regions in which they will consult with tribal leaders are:

Sid Mills, Southwest Center, Albuquerque, New Mexico: New Mexico, Colorado and eastern Utah.

Earl Barlow, Northeast Center, Minneapolis, Minnesota: Minnesota, Wisconsin, Michigan, Iowa, New York, and Maine.

Stanley Speaks, Southern Center, Oklahoma City, Oklahoma: Oklahoma, Kansas, Mississippi, Louisiana, North Carolina, and Florida.

Bill Babby, Western Center, Phoenix, Arizona: Arizona, southern Nevada, southern Utah, and southern and central California.

Vince Little, Northwest Center, Portland, Oregon: Washington, Oregon, Idaho, the northern parts of California and Nevada, western Montana, and the Metlakatla Reservation in southern Alaska.

Jerry Jaeger, North Central Center, Rapid City, South Dakota: Eastern Montana, Wyoming, North and South Dakota and Nebraska.

Mills, Barlow and Little are presently serving as Area Directors in the areas proposed as location of the new regional technical assistance service centers. Speaks is now Area Director in Anadarko, Oklahoma; Babby is presently Area Director in Sacramento; and Jaeger is Area Director in Aberdeen. South Dakota.

The four new provisional Assistant Directors of Education and the areas in which they will serve for a 30-day detail are:

Dr. Helen Miller, Northeast Center, Minneapolis: Same areas to be served by the BIA North Central and Northeast regional service centers.

Van Peters, Northwest Center, and Portland: Includes the areas of the BIA Northwest regional service center, Alaska, and some tribes in Montana.

Harry Eagle Bull, Southeast Center, Oklahoma City: Serves the same area as the BIA southern regional service center.

Peter Soto, Southwest Center, and Phoenix: Will serve the entire southwest quadrant of the country, 1nclud1ng the area of the Albuquerque BIA regional service center.

The new provisional Assistant Area Directors for Education are all serving as area education program administrators in their prospective new centers with the exception of Eagle Bull who is presently located in Aberdeen, S.D. Under the proposed new realignment for education, the 12 present areas would be reduced to four regions and the Assistant Directors for Education will have direct line authority over the education programs in their areas. The educational offices will co-exist with other BIA operations in the different locations.

Smith has asked his Deputy for Operations, John Fritz, to assume the responsibility to see that the consultation process is carried out in a proper and timely manner.

"I have instructed our six new provisional regional directors and our education assistant directors to carry out a true consultation process," Fritz said. "We want to determine if the service needs of our clientele -- the Indian people -- will be met by our new proposals. If we determine that our proposed realignment does not substantially meet the needs of our clientele then we will consider our plan amendable," he added.

The Deputy for Operations pointed out that the next 30 days will be a continuation of the consultation process began last week when he, Assistant Secretary Smith and Deputy for Policy, Roy Sampsel, met with representatives of Indian organizations, BIA central office employees and some 100 members of Congressional staffs. Direct contact with Members of Congress took place over a three day period beginning on February 12.

Fritz said the service needs of the Indian people were at the heart of this proposed reorganization. "That is why we are reducing our overhead and management costs by $16 million while increasing by $55 million the monies earmarked directly for programs that serve Indian people on the reservations," he added.

"I have also asked our provisional directors to begin the analysis having to do with staffing patterns, organizational structure, etc. for the proposed regions along with their consultation process," Fritz pointed out. He said this was important because this streamlined management concept is designed to the differing and specific needs of Indian country far into the future.

To insure the continuity of service during this consultation process, Fritz has named seven acting area directors in those present BIA area offices whose directors have been detailed to continue the consultation process. Those seven areas are: Aberdeen, Will Bowker, now serving as Assistant Area Director, Portland; Albuquerque, Barry Welch; Anadarko, Chuck Delaney; Minneapolis, Frank Annette; Phoenix, Rusty Farmer who is now Assistant Area Director in Aberdeen; Portland, Peter Three Stars, Superintendent at Western Washington Agency in Everett, Washington; and Sacramento, Eddie Edwards.

The Interior Department is requesting budget increases for fiscal 1983 to continue construction of essential water projects in the West, upgrade deteriorated facilities at national parks, and improve access to energy and other minerals on multiple-use Federal lands, Secretary of the Interior James Watt said today.

Another significant budget initiative is increased grants to States for surface mining regulation and abandoned mine land restoration, the Secretary said.

· At the same time, Interior is asking Congress for less spending on other ongoing programs in keeping with the overall austerity of President Reagan's FY 1983 budget. Thus, the sums requested for a majority of Interior agencies register a decrease from the funding voted them by Congress for the current fiscal year.

Interior's 1983 budget requests total $6,024,618,000 (excluding activities expected to be transferred from the Departments of Energy and Education under reorganization plans soon to be proposed). This is a net increase of about $293 million over the comparable FY 1982 budget level of $5,731,974,000.

"Some otherwise desirable programs will have to make do with less money until the national economy is on firmer footing," Secretary Watt said. "We have instituted tighter management controls across the board to make the best use of the limited funding available. Of the activities recommended for increases, several promise to increase jobs and prosperity, reduce our energy and mineral dependence on foreign sources, and return more money to the Treasury; others represent better stewardship of federally-owned lands and resources, notably in our national parks; and still others demonstrate our commitment to Interior's responsibilities toward Indian tribes.

"The fact that we are able to request relatively modest increases for FY' 83 reflects the success of our deep budget cutting during FY'81 and '82," the Secretary said. "Still, that certainly does not mean that the cost squeeze is ended. We will keep our commitments to essential activities by exerting constant heavy downward pressure on nonessential costs, continually making reductions wherever possible."

Interior estimates that it will receive about $20.5 billion in receipts in FY 1983. This is almost double the level expected in FY 1982. The increased FY 1983 receipts include $18 billion projected to come from revenues from oil and gas leases on the Outer Continental Shelf.

One potential source of additional revenues is the new Minerals Management Service (MMS), which will seek greatly improved collection of royalties from mineral leases on Federal and Indian lands. The Minerals Management Service has assumed responsibility for supervision of mineral leases from the former Conservation Division of the U.S. Geological Survey, from which it was formed by order of the Secretary on January 19. It is budgeted initially for $128.5 million--including an increase of $6.4 million targeted for improved royalty management systems. (Details may be found under the Geological Survey heading in the Department's detailed budget documents.) MMS will receive priority consideration for necessary added funding in the months ahead.

Highlights of the new budget requests include:

---$191 million to continue Secretary Watt's national park restoration and improvement program (PRIP) to correct major deficiencies in park facilities and address serious resource preservation problems. Watt initially asked for a $105 million increase in FY 82 over the $87.3 million requested by the previous Administration. If Congress votes the full $191 million for PRIP for FY 83, it will augment the NPS efforts to restore and improve the parks during fiscal 1983.

The fiscal 1983 total proposed for restoration and improvement, including base funding, provides $67 million for small scale maintenance, rehabilitation, and historic preservation projects; $124 million is earmarked for major capital improvements involving 46 projects in 40 parks. These projects include the rehabilitation of water and sewer systems, the reconstruction of unsafe roads and bridges, fire and safety improvements in public facilities, and the preservation of important historic structures.

---$24.6 million in operating increases for park areas to restore programs curtailed over the years due to inflationary pressures on park budgets--programs ranging from routine and special maintenance to law enforcement and including scientific research to improve park resource protection, better evaluation of concessions management, and interpretive activities to enhance park visitors' understanding of park values. New parkland acquisition would be severely limited, however, in line with the Watt policy of emphasizing better stewardship of lands already owned.

---$118 million more than in FY 82 for the construction program of the Bureau of Reclamation in the 17 contiguous Western States for work on 70 projects, including new rehabilitation and betterment work on four projects, and 7 to conduct pre-construction work on two projects. The largest of the works under way include the Central Arizona Project; Bonneville Unit of the Central Utah Project; Central Valley Project, California; Colorado River Basin Salinity Control Projects; Columbia Basin Project, Washington; and McGee Creek Project, Oklahoma. A $17 million increase is proposed for continuation of 10 loan projects; and 13 new investigations would be undertaken emphasizing energy production, municipal and industrial water supplies, and Indian water development; plus 11 new advance planning studies, proposed in a manner intended to shorten considerably the time needed to prepare a project for construction.

---Watt said the President's 1983 budget includes a contingency allowance for initial work on new Bureau of Reclamation construction starts--as yet undesignated--which will meet the Administration's criteria for cost sharing and non-Federal financing, The new starts will be selected from among projects authorized but never funded, after the Administration adopts new guidelines defining cost sharing and related criteria.

---Funds requested for the Office of Surface Mining would change only slightly from FY 82 levels overall, but significant changes would take place in how the money is allocated. Grants to States would rise to $111.9 million, one-third more than in FY 82, as the States achieve primacy for their regulatory and mined land reclamation programs, as provided in the 1977 Surface Mining Act, These increases would be offset by reductions in the funding for direct Federal programs. OSM's total budget for FY 83 is $159.8 million, down slightly from the $160.6 million appropriated for FY 82.

---A $4.2 million increase for the Bureau of Land Management (BLM) to accelerate its Outer Continental Shelf leasing program; plus a $4.1 million increase to help BLM prepare for more onshore oil and gas leasing; and a nearly $1 million increase for oil shale leasing and steps toward a 1984 tar sand leasing program.

---U.S. Geological Survey is earmarked for a $21.1 million total increase above FY 82, largely for such programs as mineral resource surveys, applied and basic geological research, oil and gas and coal resource information, water resource investigations (principally for acid rain and toxic wastes), and the operation and maintenance of the Barrow, Alaska gas fields. The $21.1 million includes the $6.4 million increase mentioned previously for improved royalty management in the new Minerals Management Service; formerly USGS' Conservation Division.

---National wildlife refuges, national fish hatcheries, and wildlife research facilities would receive a $10.2 million increase for minor rehabilitation and increased cyclical maintenance, Major rehabilitation would be increased by $6 million.

---The appropriation request for Indian Affairs exceeds 1982 funding by $88.6 million, after excluding programs to be transferred from the Department of Education. The request reflects a net increase of $47 million for operations over the FY 1982 level of $802 million. This net increase includes $2.2 million for education; $15.2 million for services such as welfare payments, law enforcement, housing and similar programs and also including $5 million for a new initiative intended to improve the management capability of small tribes; $13.7 million for economic development and employment including $10 million for a new economic development initiative; $9.5 million for natural resources development; $1.3 million for the Federal Government's trust responsibilities; $10 million for facilities maintenance; $11.1 million for general · administration; and a decrease of $16 million for overhead. Another increase is in facility construction (+$12.4 million). Road construction decreases by $3.6 million. Indian trust funds are increased by $32.8 million to a total of $601 million.

---Operating budgets for the U.S. territories and the Trust Territory of the Pacific Islands will be slightly higher than in FY 82, although the total amount requested for Territorial and International Affairs will show a $30 million decline; most of the reductions actually represent non-recurring expenditures for capital improvements such as completion of a hospital in the Virgin Islands, which is receiving $21.5 million in FY 1982, and a number of projects in Guam, American Samoa and the Trust Territory. However, sums are included for FY 83 for territorial development projects including the first phases of a hospital for the Northern Marianas ($4 million) and capitals for the emerging governments of Micronesia ($7.8 million).

---Bureau of Mines Minerals Resources Technology research on strategic and critical materials is increased in FY 1983 by $2.6 million even though the Bureau's overall research program is significantly reduced. Reductions requested from FY 1982 appropriations include:

---National Park Service: Land acquisition, a new request of $59.8 million, providing funds for deficiency awards, emergency acquisitions and overhead costs; Urban Park and Recreation Rehabilitation grants, zero-budgeted for 1983 compared with a $7.7 million appropriation in FY 82; historic preservation grants to States and to National Trust for Historic Preservation, zero-budgeted compared with $25.4 million current level.

---U.S. Geological Survey: Program reductions include earthquake and volcano hazards investigation down by $4.6 million; uranium and thorium energy investigations down by $4.7 million; geothermal investigations down by $1.9 million; oil shale investigations down $1.5 million; and Federal coal drilling down by $3.0 million. ---Office of Water Research and Technology: Down $10.6 million. The programs are proposed for termination.

---Payments in Lieu of Taxes by BLM to local governments: Down $56.3 million to a new total of $45 million, with legislative changes proposed for later transmittal to Congress. The reduction includes $5.8 million for National Wildlife Refuge lands.

---U.S. Fish and Wildlife Service: $14.9 million less for land acquisition; $4.4 million cut by discontinuing cooperative research units; a reduction of $2.8 million for other research, and animal damage control reduced $1.7 million. Thirty-one fish hatcheries would be transferred to States or closed down for a $3.7 million saving--but none of the 31 would be hatcheries that primarily produce for anadromous or Great Lakes fisheries, or for Federal mitigation or endangered species restoration.

---BLM range management: Down $4.4 million, partly by transferring some maintenance costs to range users. Forest management also would be trimmed by $2.1 million by curtailing activities in marginal timber-growing areas outside the highly productive western Oregon timber lands. Rangeland improvements financed from 50% of grazing fee receipts will drop $2.2 million because grazing fees for 1982 have been reduced pursuant to the statutory formula, largely reflecting recent declines in livestock prices paid to ranchers.

---The FY 1983 budget for the Bureau of Mines is reduced by $25.9 million. Approximately $4.0 million of this decrease is attributable to one-time funding that was in the Bureau's FY 1982 budget for construction of facilities. Another $9.2 million results from the Department's decision to discontinue funding of Mineral Institutes in FY 1983. Funding for the Bureau's mineral information program is reduced by $2.5 million. The remaining budget reductions are achieved through curtailment of Bureau research and development projects. In general, federally funded research and development by the Bureau would be limited to high-risk projects with long-term payoff. The President's Budget for Interior includes some programs proposed to be transferred from the Departments of Energy and Education. The Energy programs are the Strategic Petroleum Reserve, the Naval Petroleum and Oil Shale Reserves, and the five power marketing administrations, with total FY 1983 budget requests of approximately $1.2 billion, an increase of $258 million over the FY 1982 estimated level of $930 million. The Education programs, which are included with the Department's Bureau of Indian Affairs budget request, are the Indian Education Assistance Program and Impact Aid for Indian school construction, with a combined FY 1983 budget request of $52 million, a decrease of $29 million from the estimated FY 1982 President's budget request.

DEPARTMENT OF INTERIOR Budget Authority and Outlays (in thousands of dollars)

DEPARTMENT OF INTERIOR Budget Authority and Outlays (in thousands of dollars)

FY 1982 Budget Authority excludes $71 million for proposed FY 1982 fire suppression supplementals and $30 ·million in Contract Authority - Land and Water Conservation Fund. Outlays have been adjusted accordingly.

PRESS CONTACTS FOR FURTHER INFORMATION REGARDING INTERIOR'S FY 1983 BUDGET (Area codes need not be used from Washington, D.C., unless indicated below)

Interior's Deputy Assistant Secretary for Indian Affairs, Roy H. Sampsel, will begin negotiations February 10 with Alaskan state officials in Juneau for the transfer of 37 Bureau of Indian Affairs schools to the state education system.

In addition to the 37 elementary schools located in Alaska Native villages, the Bureau now operates one boarding high school, Mt. Edgecumbe, at Sitka, Alaska it is expected that Mt. Edgecumbe would continue operation at least through the 1982-83 school year to allow the state to develop suitable alternative plans for the high school students.

"The Bureau of Indian Affairs' schools for the Alaska Natives were established to meet needs until the state was ab le to assume the responsibility," Sampsel said. He noted that the Alaska Constitution requires the state to "maintain a system of pub lie schools open to all children of the state."

Sampsel said that the BIA and the state formalized an agreement in 1963 for the transfer of Bureau schools to state administration. There were at one time as many as 120 BIA schools in Alaska. Transfers have occurred intermittently since 1963.

Topics for discussion with state school officials and representatives of the Governor's office, Sampsel said, would include the transfer of BIA school buildings to the state, personnel issues, scheduling, and the possible need for special legislative authority.

Sampsel and BIA education officials initiated discussions with state officials on the transfer of BIA schools this past fall. At that time BIA representatives visited 36 of the 37 villages to talk with Native leaders about the proposed transfers. The one village was missed because of bad weather.

Sampsel acknowledged that reduction in the BIA's education budget made further delays in the transfer of the schools undesirable. ''We have to make substantial reductions, so it seems reasonable -- and beneficial to the state school system and the Native children -- to simply complete the transfer."

A proposed project to develop oil and gas resources within the boundaries of the Big Cypress Indian Reservation in Florida would not create significant environmental issues or concerns, the Bureau of Indian Affairs (BIA) has concluded.

The BIA has prepared an environmental assessment on a proposal by Tesoro Oil Corporation and NRM Petroleum Corporation to engage in exploration, development and production activity for oil and gas on the reservation. The proposal calls for a seismic reconnaissance survey over 32,830 acres, drilling exploratory wells and the selection of approximately 50 wells for production. The project will require the construction of pipelines, tanks, manifolds and other accessory supply facilities prior to the commencement of actual production.

Short-term impacts on the environment would be typical of those encountered elsewhere in nearby locations in Florida, the BIA said. Potential impacts on land use, wildlife habitats and air/water qualities were judged to be insignificant.

Single copies of the environmental assessment may be obtained from the BIA Eastern Area Office, 1951 Constitution Avenue, N.W, Washington, D.C. 20245 or the BIA Seminole Agency, 6075 Stirling Road, Hollywood, Florida 33024.

James H. Stevens, a member of the San Carlos Band of Apaches, has been appointed director of the Bureau of Indian Affairs' Phoenix area office. Interior Assistant Secretary Ken Smith said that Stevens' appointment would be effective April 4.

Stevens, superintendent of the Bureau's Spokane agency at Wellpinit, Washington, has been detailed twice in the past year to serve in the central office as the acting director of the Office of Trust Responsibilities. He is currently functioning in that capacity now on a detail that began in January.

Assistant Secretary Smith praised Stevens for his "administrative abilities as well as his broad knowledge of Indian matters. Jim has done an outstanding job serving as the director of Trust Responsibilities. He will be a major asset to the Phoenix area."

Stevens moves into the federal government's Senior Executive Service in his new assignment.

He has been the agency superintendent at Spokane since 1972. Prior to that he had been assistant to the superintendent at the BIA's Nevada agency.

An engineering graduate of the University of Arizona School of mines, Stevens began his career with the Bureau as a supervisory roads engineer at the Fort Apache agency in 1963.

A native of Arizona, Stevens worked eight years with the California division of highways before coming to the BIA. He is married and has three children.

Stevens succeeds Bill Finale who retired February 19.