[Federal Register Volume 61, Number 211 (Wednesday, October 30, 1996)]
[Proposed Rules]
[Pages 55941-55942]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-27758]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE INTERIOR

Minerals Management Service

30 CFR Ch. II


Meeting on Federal Oil and Gas Royalty Simplification and 
Fairness Act of 1996

AGENCY: Minerals Management Service, Interior.

ACTION: Notice of meeting.

-----------------------------------------------------------------------

SUMMARY: The Minerals Management Service (MMS), Royalty Management 
Program, is analyzing the requirements of the Federal Oil and Gas 
Royalty Simplification and Fairness Act of 1996 and developing 
strategies to implement this Act. The purpose of this notice is to 
inform the public of MMS's intention to consult with affected parties 
about the changes to MMS processes required by this Act and describe 
the method MMS will use to obtain input from the public.

DATES: A public meeting will be held on Tuesday, November 19, 1996, 
from 1 p.m. until 5 p.m.

ADDRESSES: The meeting will be held in the Building 85 Auditorium on 
the Denver Federal Center. Mail comments to: David S. Guzy, Chief, 
Rules and Procedures Staff, Minerals Management Service, Royalty 
Management Program, P.O. Box 25165, MS 3101, Denver, Colorado, 80225-
0165, courier delivery to Building 85, Denver Federal Center, Denver, 
Colorado, or e-mail David-G[email protected].

FOR FURTHER INFORMATION CONTACT: David S. Guzy, Rules and Procedures 
Staff, telephone (303) 231-3432, Fax (303) 231-3194, or e-mail 
David__G[email protected]. State and industry organizational 
representatives are listed below:

American Petroleum Institute

Richard McPike, Fina Oil, P.O. Box 2159, Dallas, Texas 75221, (214) 
750-2820, Fax: (214) 750-2987
Backup: David Deal, 1220 L. Street N.W., Washington, DC 20005, (202) 
682-8261, Fax: (202) 682-8033

Council of Petroleum Accounting Societies

Bill Stone, Exxon, P. O. Box 2024, Houston, Texas 77252-2024, (713) 
680-7667, Fax: (713) 680-5280

Domestic Petroleum Council

David Blackmon, Meridian Oil, 801 Cherry, Suite 700, Fort Worth, Texas 
76102, (817) 347-2354, Fax: (817) 347-2877

Independent Petroleum Association of America

Ben Dillon, 1101 16th St N.W., Washington, DC 20036, (202) 857-4722, 
Fax: (202) 857-4799

Independent Petroleum Association of Mountain States

Barbara Widick, 518 17th Street, Denver, Colorado 80202-4167, (303) 
623-0987, Fax: (303) 893-0709

Mid-Continent Oil & Gas Association

Patty Patten, OXY USA, Inc., 110 W. 7th Street, Tulsa, Oklahoma 74137, 
(918) 561-3703, Fax: (918) 561-4364

Natural Gas Supply Association

George Butler, Chevron, P.O. Box 3725, Houston, Texas 77213-3725, (713) 
754-7809, Fax: (713) 754-3366

Rocky Mountain Oil & Gas Association

Mary Stonecipher, Amoco Corporation, P.O. Box 591, Tulsa, Oklahoma 
74102, (918) 581-4354, Fax: (918) 581-4526, Backup: Carla Wilson, 1775 
Sherman Street, Suite 2501, Denver, Colorado 80203, (303) 860-0099, 
Fax: (303) 860-0310

Royalty Policy Committee

Don Hoffman, Department of Revenue, State of Montana, Mitchell 
Building, Room 330, Helena, Montana 59620, (406) 444-3587, Fax: (406) 
444-2900

State and Tribal Royalty Audit Committee

Wanda Fleming, Montana Department of Revenue, P.O. Box 202701, Helena, 
Montana 59620-2701, (406) 444-3573, Fax: (406) 444-3696

Western Governors' Association

Paul Kruse, Assistant Director, Federal Land Policy, State of Wyoming, 
Herschler Building, 3 West, 121 West 25th Street, Cheyenne, Wyoming 
82002-0600, (307) 777-7331, Fax: (307) 777-5400

Western States Land Commissioners Association

Maurice Lierz, New Mexico State Land Office, P.O. Box 1148, Santa Fe, 
New Mexico 87504-1148, (505) 827-5735, Fax: (505) 827-4262

or contact Mike Miller, MMS at (303) 231-3413 or via e:Mail at 
Mike__M[email protected].

SUPPLEMENTARY INFORMATION: President Clinton signed the Federal Oil and 
Gas Royalty Simplification and Fairness Act (RSFA) on August 13, 1996, 
to improve the management of royalties from Federal and Outer 
Continental Shelf oil and gas leases. This is the first major 
legislation affecting royalty management since the Federal Oil and Gas 
Royalty Management Act of 1982 (FOGRMA) was passed in January 1983. The 
key issues of RSFA implementation listed by near term and longer term 
focus are:

Near Term Focus

      Report and Pay/Credit Interest on Overpayments.
      Accept Interest Payments and Reporting from ``Designees'' 
on Underpayments.
      Issue Enforceable Demands (Orders to Pay) to Operating 
Rights.
    Owners Related to Production Occurring After 8/31/96.
      Implement the Repeal of Section 10 of the Outer 
Continental Shelf Lands Act.
      Provide for Self Bonding for Appeals Relating to 
Underpayments of Production After 09/01/96.
      Implement Section 205 Amendments (State Delegations) in 
Consultation With States.
      Implement Reporting Requirements on Takes/Entitlement 
Basis.
      Implement Marginal Properties Exception to RSFA 
Entitlement Reporting Requirements.
      Provide Accounting, Reporting, and Auditing Relief for 
Marginal Properties.
      Process Written Refund Requests Within 120 Days of 
Receipt.

[[Page 55942]]

      Address Cost/Benefit Provision of the RSFA.

Long Term Focus

      BLM/OMM Approval of Unit/Communitization Agreements 
Within 120 Days.
      Monitor Adjustments Beyond the ``6-year Adjustment 
Period'' or Closed Audit Periods for Production After 09/01/96.
      Assess for Chronic Erroneous Reporting.
      Resolve and Bill, if Appropriate, Existing Takes/
Entitlement Issues as of RSFA (08/13/96) Within 2 Years.
      Allow for Prepayments of Future Revenue Streams.
      Implement 7 Year Statute of Limitations for MMS' 
Processes.
      Process All Appeals Within 33 months.
    We believe that contacts with both State government agencies and 
the oil and gas industry are critical to gaining information, views, 
ideas and approaches that will facilitate MMS moving forward with 
implementation plans.
    Also, we believe that such contacts are important for keeping our 
affected constituencies informed on the status of implementation 
efforts.
    We believe our implementation strategy should be flexible and 
provide for a range of outreach approaches. For example, topics such as 
how to best establish the identity of designees and operating rights 
owners may be appropriate for Customer Feedback Sessions to obtain 
customer input during the evaluation of possible implementation 
alternatives. Other topics such as how to implement the provisions for 
marginal properties as well as the implementation of FOGRMA Section 205 
amendments (state delegations) are likely candidates for a workshop 
approach to facilitate extensive and ongoing dialog. Development of the 
major implementing regulations required by RSFA will also require 
extensive outreach with State government agencies and industry using 
this strategy.
    MMS has invited representatives from State and industry 
organizations to participate in the more structured discussion. 
Organizational representatives and the MMS contact are listed in the 
FURTHER INFORMATION section. Please direct your questions and comments 
to the representatives.
    In complying with the Small Business Regulatory Enforcement 
Fairness Act of 1996, we are also soliciting comments from small 
entities as to the impact revised reporting requirements and 
regulations resulting from RSFA will have on their operations. In 
preparing rules required by RSFA, we will also work to comply with new 
requirements of other recently passed laws and Executive Orders 
affecting regulatory development.

Customer Feedback Sessions

    MMS met with a working group of representatives from State 
government agencies and industry organizations in an initial outreach 
planning meeting in October 1996.
    The next phase of our outreach strategy centers around a series of 
feedback sessions designed to present and discuss specific actions 
taken and planned to implement one or more of the previously listed key 
RSFA issues.
    We feel that we can best work with our stakeholders on an issue-by-
issue basis to implement the requirements of RSFA. At these sessions 
MMS would describe work to date including any decisions reached which 
should, because of the timing, be communicated to stakeholders.
    As we schedule issue-specific meetings, we will notify members of 
the working group that met in October. Each member of the working group 
will then make sure those stakeholders whom they represent are 
appropriately represented at the scheduled meetings. The objectives and 
expected benefits of these meetings include a forum to gain an 
understanding of the various positions of the stakeholders regarding 
the issues presented. Periodically, we will meet with the entire 
working group to discuss overall progress in implementing all issues 
related to RSFA.

Workshop Strategy

    The workshop strategy is intended to focus on selected aspects of 
RSFA where MMS believes that State government agencies and industry 
positions should be fully developed and evaluated before MMS selects 
its implementation approach.
    This approach will rely primarily on workshops to be held in 
Denver, Colorado. Other locations such as Houston may be appropriate 
for selected workshops. The topics will be developed in consultation 
with industry trade groups and State government agencies. MMS will 
determine the final list of topics and the agenda for each workshop.

Payor and Operator Training Sessions

    These sessions which take place several times a year provide 
opportunities for exchange of information and ideas on new initiatives 
currently underway. Industry representatives at these sessions can 
attend with the expectation of some level of discussion on the RSFA 
issues. Questions can be raised and discussed.

Day to Day Contacts

    Within three of RMP's divisions, employees and contractor personnel 
have day to day contacts with industry representatives. Questions can 
be asked daily by many payors and operators reporting to RMP.

Other Sessions

    Many other sessions that involve industry and State government 
agencies will take place over the next few months which are not 
specifically organized to deal with RSFA or its implementation, but 
which will nevertheless require a level of understanding of RSFA for 
attendees. Sessions for discussing electronic reporting will take place 
and our representative can be asked to discuss the implications of RSFA 
as it relate to electronic reporting. Clearly, industry will require as 
much lead time as RMP to properly prepare for future changes to 
reporting requirements.
    In order to accomplish a broad based fact finding on how the 
requirements of RSFA affect our customers and stakeholders, comments 
from the public are encouraged on any issue related to implementing 
RSFA. In addition to attendance at the previously described sessions 
and workshops comments can be made in writing and be sent directly to 
MMS using instructions in the ADDRESSES part of this notice.

    Date: October 22, 1996.
James W. Shaw,
Associate Director for Royalty Management.
[FR Doc. 96-27758 Filed 10-29-96; 8:45 am]
BILLING CODE 4310-MR-P