[Federal Register Volume 63, Number 228 (Friday, November 27, 1998)]
[Notices]
[Pages 65610-65613]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-31322]


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DEPARTMENT OF THE INTERIOR


Minerals Management Service

Agency Information Collection Activities: Proposed Collection; 
Comment Request

AGENCY: Minerals Management Service, DOI.

ACTION: Notice of information collection solicitation.

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SUMMARY: Under the Paperwork Reduction Act of 1995, the Minerals 
Management Service (MMS) is soliciting comments on an information 
collection using an optional electronic spreadsheet to simplify 
creation of the Form MMS-2014 when reporting purchases of the 
Government's royalty oil.

DATES: Written comments should be received on or before January 26, 
1999.

ADDRESSES: Comments sent via the U.S. Postal Service should be sent to 
Minerals Management Service, Royalty Management Program, Rules and 
Publications Staff, PO. Box 25165, MS 3021, Denver, Colorado 80225-
0165; courier address is Building 85, Room A613, Denver Federal Center, 
Denver, Colorado 80225; e:mail address is RMP.[email protected].

FOR FURTHER INFORMATION CONTACT: For questions concerning this 
information collection--Dennis C. Jones, Rules and Publications Staff, 
phone (303) 231-3046, FAX (303) 231-3385, e-mail 
Dennis.C.J[email protected]. For questions concerning the electronic 
spreadsheet--Larry Barker, Division of Verification, phone (303) 231-
3157, FAX (303) 231-3189, e-mail Lawrence.B[email protected].

SUPPLEMENTARY INFORMATION: In compliance with the Paperwork Reduction 
Act of 1995, section 3506 (c)(2)(A), we are notifying you, members of 
the public and affected agencies, of this collection of information, 
including a newly-developed electronic spreadsheet. On September 3, 
1998, OMB emergency approval was granted for MMS to provide, for 
optional use, an

[[Page 65611]]

electronic spreadsheet to simplify required submission by industry of 
payment and other data associated with royalty production purchased 
from MMS (OMB Control Number 1010-0118). One version of this 
spreadsheet may be used to report purchase of Federal-only RIK 
production. A second version may be used to report Federal purchase 
data and also to submit data in a form acceptable to the State of 
Wyoming (State) on the State RIK production jointly sold with Federal 
production. The publication of this Notice has been timed to coincide 
with current RIK purchasers' use of the new spreadsheet so that they 
can provide feedback to MMS on their experience using it to report 
Federal production. Examples of both versions of the spreadsheet are 
attached for use of others who may wish to comment (Attachment 1). MMS 
would like to know, with regard to reporting Federal RIK purchases 
only:
    (a) Is using the spreadsheet easier and more efficient than 
preparing a manual Form MMS-2014?
    (b) Is this information collection necessary for us to properly do 
our job?
    (c) Have we accurately estimated the industry burden for responding 
to this collection?
    (d) If not, please explain.
    (e) Can we enhance the quality, utility, and clarity of the 
information we collect?
    The Secretary of the Interior is responsible for the collection of 
royalties from lessees producing minerals from leased Federal lands. 
The Secretary is required by various laws to manage the production of 
mineral resources on Federal onshore and offshore leases and 
agreements, to collect the royalties due, and to distribute resulting 
revenues in accordance with those laws. MMS performs the royalty 
management functions for the Secretary. Most royalties are now paid in-
value--when a company or individual enters into a contract to develop, 
produce, and dispose of minerals from Federal lands, that company or 
individual agrees to pay the United States a share (royalty) of the 
full value received for the minerals taken from leased lands. MMS uses 
an automated fiscal accounting system, the Auditing and Financial 
System (AFS), to account for revenues collected from Federal leases/
agreements. The Report of Sales and Royalty Remittance, Form MMS-2014, 
is the only document used for reporting royalties paid in-value and 
other lease-related financial transactions to MMS. The AFS relies on 
data reported by payors on Form MMS-2014 for the majority of its 
processing.
    In addition to accounting for royalties reported by payors, the 
AFS, using Form MMS-2014 information, performs numerous other 
functions. These functions include monthly distribution of mineral 
revenues to State and General Treasury accounts; providing royalty 
accounting and statistical information to States and others who have a 
need for such information; and identifying under-reporting and 
nonreporting so MMS can promptly collect revenues. Sales and royalty 
information gathered through the AFS is compared with production data 
collected by an MMS automated production accounting system--the 
Production Accounting and Auditing System (PAAS). This AFS/PAAS 
comparison of reported sales with reported production provides MMS with 
the ability to corroborate reported production volumes to help verify 
that the proper royalties are being collected.
    MMS has begun the first of three pilot programs to study the 
feasibility and cost/effectiveness of taking the Government's oil and 
gas royalties in-kind (RIK), that is, as a share of production rather 
than an in-value payment. Successful bidders who entered into RIK 
contracts with MMS pursuant to an Invitation for Bids (IFB) published 
July 1, 1998 are taking federal royalty oil beginning October, 1998. 
The contracts require purchasers of royalty oil to make payment to MMS 
for the royalty oil and report payments and related data. The first 
payments and reports are due by November 30, 1998.
    Since RIK pilot purchasers will not need to use the full range of 
reporting instructions and methods on Form MMS-2014, MMS has made 
available at no cost an electronic spreadsheet to more simply create 
electronic Form MMS-2014. The purchaser has the choice of reporting 
either (1) through use of the spreadsheet (which will electronically 
generate a Form MMS-2014 for MMS) (2) on a hard copy Form MMS-2014, or 
(3) through a company's own MMS-compatible automated reporting systems 
(which a number of present in-value royalty reporters currently use).
    Before providing the electronic spreadsheet to purchasers, MMS will 
enter into each purchaser's copy of the spreadsheet the following 
reference data--lease number, royalty rate, property name, total 
property volume, percent allocated to Federal ownership, percent 
allocated to fee or State ownership and what percent of total property 
volume a particular lease represents. MMS needs the reference data to 
identify and account for purchasers' reports of payment for RIK 
production purchased from those properties.
    The purchaser will, on its monthly Form MMS-2014, subsequently 
enter for the entire property (1) RIK volumes purchased, (2) the unit 
price, (3) total value, and (4) quality value. If reference data items 
such as royalty rate should change, purchasers would update the 
electronic spreadsheets for continued (always optional) use based on 
information provided by BLM or MMS personnel and lessees/operators.
    If purchasers need to amend an initial Form MMS-2014 report, they 
will have the choice of doing so either by entering changes manually on 
a hard-copy Form MMS-2014 or by using MMS's established electronic 
reporting process.
    MMS has chosen to defer development of a permanent form for 
reporting of the purchase of RIK production until MMS has gained the 
benefit of experience from the RIK pilots. If simplifying filing of 
Form MMS-2014 data through use of the electronic spreadsheet is 
effective for the 1 to 3-year period represented by the Wyoming crude 
oil RIK pilot, then MMS plans to continue use of this approach through 
the second RIK pilot (limited to gas from Texas 8(g) zone) and the 
third RIK pilot (larger volumes of gas from wider areas of the Gulf of 
Mexico Region). Using the electronic spreadsheet has the advantage of 
eliminating or delaying creation of a new form until its requirements 
are better defined, while still meeting MMS'' needs to properly 
distribute funds, carry out the AFS/PAAS comparison, and provide 
information to other recipients about their share of payments 
distributed from Federal revenues.
    This collection represents a significant net reduction in burden. 
While a few new companies may report, the overall number of respondents 
is greatly reduced. This is because only one purchaser need report one 
or two lines of data aggregating volumes from a multi-lease property, 
rather than multiple lessee/producers each reporting at the detailed 
revenue source level that in-value royalty payments would require for 
the same properties. The electronic spreadsheet allocates data needed 
by MMS automatically to levels of the revenue sources within each lease 
agreement on the Form MMS-2014, reducing complexity of reporting. We 
estimate that the time required to prepare and submit this information 
is about 2 minutes per line monthly.


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Attachment 1
[GRAPHIC] [TIFF OMITTED] TN27NO98.001


[[Page 65613]]

[GRAPHIC] [TIFF OMITTED] TN27NO98.002



    Dated: November 17, 1998.
Lucy Querques Denett,
Associate Director for Royalty Management.

BILLING CODE 4310-MR-P
[FR Doc. 98-31322 Filed 11-25-98; 8:45 am]
BILLING CODE 4310-MR-G