[Federal Register Volume 64, Number 135 (Thursday, July 15, 1999)]
[Rules and Regulations]
[Pages 38116-38124]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-18005]



[[Page 38116]]

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DEPARTMENT OF THE INTERIOR

Minerals Management Service

30 CFR Parts 210 and 216

RIN 1010-AC40


Electronic Reporting

AGENCY: Minerals Management Service, Interior.

ACTION: Final rule.

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SUMMARY: The Minerals Management Service (MMS) is amending its 
regulations to require reporters to submit selected royalty and 
production reports electronically, to extend the due date for 
production reports filed electronically, and to eliminate the reporting 
of most wells that are in drilling status. This rulemaking provides 
electronic reporting exceptions for reporters who meet certain 
criteria. These amendments will reduce administrative costs and 
increase operating efficiencies for industry and MMS.

EFFECTIVE DATES: This final rule will be effective on November 1, 1999.

FOR FURTHER INFORMATION CONTACT: David S. Guzy, Chief, Rules and 
Publications Staff, Royalty Management Program, MMS; telephone (303) 
231-3432; fax (303) 231-3385; e-mail David.G[email protected].

SUPPLEMENTARY INFORMATION: The principal authors of this rule are Mary 
Williams, Ralph Spencer, Barbara Lambert, Tim Allard, and Gail Solaas 
of the Royalty Management Program (RMP), MMS.

I. Background

    MMS published a proposed rulemaking entitled ``Electronic 
Reporting'' on April 8, 1998 (63 FR 17133). The proposed rulemaking 
provided a 60-day public comment period which ended on June 8, 1998. We 
have analyzed the comments we received and amended our proposed rule to 
meet public concerns when prudent and necessary.

II. Comments on Proposed Rule

General Comments

    Comment--One industry trade association commented that it does not 
believe MMS has a legal basis for requiring electronic reporting. The 
commenter stated that the proposed rule has only a vague reference to 
various mandates to use new technologies to improve programs. The 
commenter recommended MMS withdraw the proposed rule.
    Response--Our authorities for issuing this rule are cited at the 
beginning of each part. One of the primary purposes of this rule is to 
comply with 44 U.S.C. 3506 which requires Federal agencies to carry out 
information management activities efficiently, effectively, and 
economically. The Secretary of the Interior can also prescribe 
necessary and proper rules and regulations to administer mineral leases 
in accordance with 30 U.S.C. 189 and 1701. We believe we have the legal 
authority to require electronic reporting; therefore, we have no reason 
to withdraw the rule.
    Comment--One industry association commented that because the 
majority of lines are already reported to MMS electronically and MMS 
will be revising reporting formats in the near future, MMS should not 
mandate electronic reporting at this time. The commenter suggested that 
MMS use other methods to encourage electronic reporting.
    Response--We agree with the commenter that a majority of our 
lines--80 percent of our royalty lines and 60 percent of our production 
lines--are reported electronically. However, the electronic lines are 
submitted primarily by very large companies and are a small number of 
our total reports. We continue to receive over 20,000 paper reports 
monthly, generally from small reporters. These paper reports must be 
manually keyed, filed, boxed, and stored until they can be destroyed in 
accordance with Federal record disposal requirements. These manual 
tasks are costly for the Government and taxpayers.
    We also agree with the commenter that our royalty and production 
reports may be revised as a result of reengineering efforts that are 
currently ongoing. One of the most important reengineering proposals is 
to eliminate the Form MMS-3160, Report of Monthly Operations, within 2 
years. Because we are proposing to eliminate the Form MMS-3160 in 2 
years, we have decided to remove the requirement contained in 
Sec. 210.20 of our proposed rule to report the Form MMS-3160 
electronically. We are also eliminating all other references to 
mandatory electronic reporting of Form MMS-3160 in this final 
rulemaking.
    The proposal to eliminate the Form MMS-3160 was published in the 
Federal Register, along with other production reporting changes, on 
February 23, 1999 (64 FR 8844). Most operators of onshore properties 
report production on Form MMS-3160, although they have the option of 
reporting on Form MMS-4054, Oil and Gas Operations Report. All offshore 
operators, however, must report their production on Form MMS-4054. 
Consequently, MMS and those operators having both onshore and offshore 
production must maintain and support two separate reporting systems--
one for the Form MMS-3160 and one for the Form MMS-4054. We are 
proposing that operators use one form, a revised Form MMS-4054, to 
report both onshore and offshore production because we believe it is 
more efficient for MMS and industry.
    With respect to the commenter's suggestion that MMS use other means 
to encourage electronic reporting, we have promoted electronic 
reporting for many years by offering various options other than this 
rule. However, we have numerous indicators--such as cost savings from 
less data to key manually, fewer reporting errors to correct, and less 
paper records to file and store--that show electronic reporting is more 
accurate, efficient, and economical than paper reporting. Companies 
reporting electronically also experience cost and time savings over 
paper reporting. Moreover, technology is currently available to easily 
expand the use of electronic reporting and reduce or eliminate paper 
reporting. This rulemaking enables us to take greater advantage of 
electronic reporting and storage technologies that will save time and 
money for both MMS and industry.
    For all the reasons discussed above, we believe there is no 
justification for delaying the requirement for electronic reporting of 
Forms MMS-2014 and MMS-4054.
    Comment--Two companies commented on the need to file paper reports 
for adjustments or adding lines after an electronic report is ready to 
send. One company stated they would have to build an elaborate 
reporting system costing tens of thousands of dollars. One company 
wanted a ``grandfather'' clause for adjustments prior to the 
implementation date.
    Response--We currently receive manual adjusting reports from many 
companies who report most or all of their initial data electronically. 
Typically, these manual reports are facsimiles generated from a 
computer. Facsimile reporting indicates that the company is entering 
the data into a computer but is unable to convert these adjustments 
into an electronic format. In these cases, we suggest the company use 
one of our other electronic reporting options to convert these 
adjusting entries so they can be filed electronically. For example, 
many companies use a Microsoft Excel spreadsheet which can be easily 
converted to a Comma Separated Values format and sent via e-mail or 
diskette. We recognize that the electronic format for adjustments under 
this scenario

[[Page 38117]]

would be different from the format for the current month's report. 
However, MMS systems have the flexibility to accept different 
electronic formats for the same time period. We do not believe that 
this simple conversion would cost tens of thousands of dollars because 
the data is already compiled in a company's computer. For these 
reasons, we did not modify the final rule to ``grandfather'' 
adjustments for periods prior to the effective date.
    Comment--One commenter was concerned with the statement in the 
background section that ``Reporters who use electronic reports 
experience few problems with converting or submitting their monthly 
reports.'' The company stated that they have experienced problems with 
generating the Electronic Data Interchange (EDI) transmission, with MMS 
receiving the transmission, and with sending large volumes of data. 
When these problems occurred, MMS required submission by tape. The 
company had also experienced an increase in the costs of reporting via 
EDI versus magnetic or cartridge tape.
    Response--MMS was not aware of the problems this company 
encountered when generating a ``live'' EDI transmission. We usually 
discover and correct EDI transmission problems during sample testing 
and subsequent EDI files are generated without difficulties.
    Regarding large volume transmissions, the Value Added Network (VAN) 
service provider MMS currently uses is unable to receive EDI 
transmissions containing file sizes larger than 10 megabytes. Although 
it is unusual to exceed this file size, the following solutions to this 
problem are available to reporters:
    1. The reporter can ask MMS to assist in the creation of smaller 
reports for multiple EDI transmissions, which do not increase the 
reporter's cost;
    2. The reporter can ask the VAN service provider to suggest unique 
solutions on an individual basis; and
    3. Reporters can submit data in a magnetic tape format.
    Regarding MMS's request that the reporter submit data by tape, we 
do not mandate a specific primary method of transmission. However, we 
strongly recommend that a reporter have a backup method available in 
case its primary method fails as apparently happened in this instance. 
MMS technical staff can assist reporters in resolving implementation 
problems with any method they choose.
    We agree with the commenter that reporting via EDI has higher 
initial costs. In an effort to reduce VAN charges, we eliminated some 
reference data elements when we initially established the EDI format. 
However, both Government and industry benefit from standardized 
reporting inputs, improved data integrity, proven VAN reliability, and 
the enhanced confidentiality and security.

Specific Comments

    Section 210.20(b)(2)(i)--now Sec. 210.21(a)(2)(i)--One commenter 
requested additional information to determine if electronic reporting 
would be helpful. The commenter's questions are: Has the MMS improved 
the Monthly Report of Operations, Form MMS-3160, software? Does it now 
print single-page versions of the report? What do the printed Form MMS-
2014 reports look like? Are the Form MMS-3160 and Form MMS-2014 reports 
integrated in any way? Can the templates be incorporated into our Lotus 
1-2-3 worksheets?
    Response--As noted earlier, we have removed the requirement that 
reporters submit the Form MMS-3160 electronically from this final rule. 
However, if reporters should voluntarily choose to submit the Form MMS-
3160 electronically, we offer the following information.
    MMS has not changed the Form MMS-3160 template software. This 
software prints the Form MMS-3160 on two pages as it always has. The 
printed Form MMS-2014 reports generated by our new 2014 template 
software mirrors the paper Form MMS-2014. The Forms MMS-2014 and MMS-
3160 are not integrated in any way. Neither of these templates can be 
incorporated into any spreadsheet or database software applications. 
However, if reporters have stored their report data electronically, it 
is a relatively easy process to download the required information into 
either a Comma Separated Values (CSV) or ASCII format once you have the 
appropriate MMS-approved record layouts in your possession. You may 
find these record layouts on our Internet site at http://
www.rmp.mms.gov, Customer Services, Publication Services, Forms.
    Section 210.20(d)--now Sec. 210.21(c)--One industry commenter 
wanted to know about the electronic reporting guidelines, getting 
samples approved, electronic commerce agreements and security measures. 
What are they? How cumbersome will they be to implement? How will we 
prove that our reports have been electronically filed on time? When the 
MMS sends out error notices with their accompanying bills for 
penalties, how do you prove what was submitted?
    Response--To answer most of these questions, we have published our 
EDI Handbook, Template User Guide, and Floppy Diskette and Magnetic 
Tape Reporting instructions on our Internet site at http://
www.rmp.mms.gov under Customer Services, Publication Services, 
Handbooks. We can also mail a paper copy of these guides to any company 
interested in converting to electronic reporting. The user guides 
provide detailed instructions on how to use the two template reporting 
options currently available to reporters. Additional reporting 
information can be found at http://www.rmp.mms.gov, see Customer 
Services, Publication Services, Forms, Electronic Commerce Information. 
Reporters may be particularly interested in the Electronic Commerce 
Brochure found at this last site. This 2-page document details all the 
electronic reporting options currently available at MMS.
    MMS will approve a sample electronic report in 3 to 5 working days, 
depending upon the date during the month the sample is received. This 
process is a simple one in which MMS will notify a reporter that either 
the sample report is acceptable and approved for live processing, or 
that the sample report must be changed in one or more fields and re-
submitted. Thereafter, each reporter submitting an electronic report 
will receive an electronic acknowledgment from MMS stating the date and 
time a report was received. Reporters can use this acknowledgment as 
proof that they submitted the report timely.
    We maintain a record of each company's original report to support 
any bills for erroneous reporting. We will continue to contact any 
company whose lines are rejected and corrected within our Auditing and 
Financial System. Our error correction process will not change simply 
because we receive reports electronically.
    With respect to security measures, we believe security is an 
integral part of electronic reporting. For example, reporters selecting 
the EDI reporting option must utilize a VAN to process their 
transmissions to MMS. VANs are private networks that provide 
confidentiality and security through user authentication, non-
repudiation, and data encryption. For e-mail transmissions over the 
Internet, all users must register with RMP to establish themselves as 
an authorized reporter. MMS will not process data files submitted by 
reporters who have not registered. Additionally, e-mail files are 
compressed using PKZip software with a password for added security. 
This compression measure prevents others from seeing actual report 
data. Both the reporter and MMS must use the correct

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PKZip password before actual data becomes available for processing.
    With respect to the Electronic Commerce Agreement (ECA), the 
information about electronic reporting contained in an ECA is now 
contained in this rule. Also, as discussed above, the passwords used in 
electronic reporting will ensure the confidentiality of information 
formerly contained in the ECA. Thus, we decided to eliminate the ECA 
which was required under proposed Sec. 210.20(d)(2). We want to make 
reporting electronically to MMS as simple and easy as possible.
    Section 210.20(f)--now Sec. 210.22(a)--One commenter is unclear on 
how much time payors will be given to make the appropriate system 
changes, have reports approved, sign electronic commerce agreements, 
etc. The 90 days allowed for a new reporter, as noted in this section, 
would appear inadequate for initial development and implementation.
    Response--The 90-day timeframe (equivalent to 3 months) for new 
reporters assumes that most new reporters will be using an automated 
system to account for their production and sales or, at the very least, 
have a computer. We have two templates available upon request. One 
requires a 386 computer using Microsoft Windows 3.1 or better, while 
the other requires a 486 computer and Microsoft Windows 95. We have 
several other electronic reporting options available and are developing 
an Internet application for the near future.
    The approval process is not time-consuming. For example, we try to 
use the sample electronic report as the actual report for the month 
submitted unless we encounter problems that we cannot resolve over the 
telephone. On average, a company can select one of the templates or any 
of our other electronic reporting options and receive approval within 
30 days. As noted earlier, we have eliminated the requirement to file 
an ECA in an effort to simplify and speed the process.
    Given the various reporting options that are available and the 
quick approval process, we believe 3 months are sufficient for a new 
reporter to begin electronic reporting. Current reporters submitting 6 
lines or more will have until November 1, 1999--the effective date of 
this rule--to convert to electronic reporting. See Sec. 210.20 and 
210.22 for electronic reporting conversion dates and exceptions, 
respectively.
    Section 210.20(g)--now eliminated--One commenter was concerned with 
occasional equipment/electrical failure and what MMS thinks is 
``reasonable'' in terms of a fixed fee per report line for 
noncompliance. The commenter suggested MMS include a clause to cover 
exceptions for occasional equipment/electrical failure. Another 
commenter stated that the proposed rule is unclear about whether the 
provision for the fee applies only to new reporters or to current 
reporters who fail to comply. The commenter also questioned the need to 
assess a fee for noncompliance. Because MMS is already processing paper 
reports and this proposal will encourage reporters to switch to 
electronic reporting, the Government cost to process paper reports will 
decrease, rather than increase. Also, under RMP's reengineering 
initiative, the data entry burden should be further reduced.
    Response--We have eliminated proposed Sec. 210.20(g) which stated 
that we would assess a fee if a reporter did not convert to electronic 
reporting. We remind reporters, however, that they are subject to civil 
penalty procedures under 30 CFR part 241 if they fail to comply with 
any MMS regulation. These penalty procedures would pertain to reporters 
who do not comply with the scheduled conversion dates provided in 
Sec. 210.20(a). In addition, we have extended the effective date of 
this rule from December 31, 1998 to November 1, 1999, to allow 
reporters sufficient time to convert to electronic reporting. Over the 
next few months, we will be working very hard to help reporters convert 
to electronic reporting as soon as possible.
    Section 210.52--One commenter wanted clarification on the statement 
``You must submit a completed Report of Sales and Royalty Remittance 
(Form MMS-2014) with all payments * * *.'' The commenter wants to know 
if reporters can submit the Form MMS-2014 electronically independent of 
the electronic payments.
    Response--Yes, the Form MMS-2014 can be submitted electronically 
independent of the electronic payment. The payor assigned document 
number is used to link reports and payments. Many companies currently 
send electronic and paper reports and a single electronic payment. We 
allow reporters to send their electronic payment on the due date and 
their electronic reports a few days before the payment. These 
independent submissions provide flexibility to meet individual company 
needs.
    Section 216.50(c)--One company commented that extending the due 
date for production reports by 10 days to the 25th of the second month 
following production will place them in jeopardy of meeting the Form 
MMS-2014 due date of the last day of the second month for making 
estimated royalty payments to MMS. The company reports and pays 
royalties for 12 clients. They recommend that we change the due date to 
a 5-day extension for production reports or extend the due date for the 
Form MMS-2014 by 5 days.
    Response--The extended due date assists in reducing the number of 
amended production reports without impacting the timeliness of data we 
must process and send to States, tribes, and other Federal agencies. 
Because automated reports are entered into our computer system the same 
day they are received, they take less time to process than paper 
documents. We piloted the 10-day extension for 1 year and received no 
information indicating that companies were dependent upon the 
production report to complete the Form MMS-2014. Royalty is typically 
calculated using run tickets for liquids, meter readings for gas, and 
other documents that are provided by lease operators. We believe you 
should use the information on these documents to prepare the Form MMS-
2014, not the production report. We cannot change the due date of the 
Form MMS-2014 and the associated royalty payment because of lease terms 
and requirements in the Federal Oil and Gas Royalty Management Act of 
1982, 30 U.S.C. 1711 et seq. We must have the Form MMS-2014 in order to 
distribute royalty payments timely to the proper Federal, State, and 
Indian recipients. MMS will continue the 10-day extension of the 
production reporting due date not only as an incentive for electronic 
reporting but also to reduce the number of amended reports.

III. Section-by-Section Analysis

    The following paragraphs summarize the most significant changes we 
made to our proposed rule that was published on April 8, 1998 (63 FR 
17133):

Section 210.20

    We eliminated the requirement to file the Form MMS-3160 
electronically.

Section 210.20(a)

    We added a timetable to Sec. 210.20(a) which phases small reporters 
into electronic reporting over the next 2\1/4\ years. We added the 
timetable in order to: (1) Minimize the impacts, if any, on small 
businesses; and (2) give small businesses time to make any operational 
changes necessary to comply with our electronic reporting requirements. 
In addition to the table, we added a new paragraph (b) to clarify what 
we mean by ``line'' and a new paragraph (c) to clarify what we mean by 
``form''

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because both terms are referred to in the timetable in paragraph (a). 
For purposes of this part, multiple submissions of the same form in one 
month equals one form. For example, if you submitted 10 Form MMS-4054's 
containing 3 lines each, MMS would consider that to be one form with 30 
lines.

Section 210.20(b)

    We moved proposed Sec. 210.20(b) to new Sec. 210.21(a) for clarity 
purposes.

Section 210.20(c)

    We moved proposed Sec. 210.20(c) to new Sec. 210.21(b) and added 
the phrase ``or by accessing our Internet site at www.rmp.mms.gov'' to 
provide reporters with an additional source for our electronic commerce 
brochure.

Section 210.20(d)

    We moved proposed Sec. 210.20(d) to new Sec. 210.21(c) and deleted 
Sec. 210.20(d)(2) which required reporters to submit an Electronic 
Commerce Agreement.

Section 210.20(e)

    We combined the provisions in this proposed Sec. 210.20(e) with new 
Sec. 210.21(c) for further clarification.

Section 210.20(f)

    We removed proposed Sec. 210.20(f) and included the 3-month grace 
period for new reporters in new Sec. 210.22(a).

Section 210.20(g)

    We deleted this proposed Sec. 210.20(g) which stated that we would 
assess a fee if a reporter did not convert to electronic reporting. For 
further information, see our response to public comments under 
Sec. 210.20(g).

New Sec. 210.22

    We added new Sec. 210.22 which provides two grace periods and two 
exclusions to our electronic reporting requirements.
     The first grace period MMS will allow is if you become a 
new MMS reporter after any of the required conversion dates. In such 
cases, MMS will allow you 3 months from the day your first report is 
due to begin reporting electronically (this grace period was originally 
contained in proposed Sec. 210.20(f) and defined as 90 days). For 
example, if you become an MMS reporter by leasing 6 new producing 
properties (equivalent to 6 lines) on April 16, 2000, your first Form 
MMS-2014 for April 2000 sales will be due May 31, 2000. You will have 3 
months--or until August 31, 2000--to begin submitting the Form MMS-2014 
electronically. MMS will continue to accept paper forms during the 
grace period.
     The second grace period is for when you exceed the maximum 
number of lines you are allowed to report on paper under 
Sec. 210.20(a). In that case, you have 3 months from the last day of 
the month in which you exceeded the line limit to begin reporting 
electronically. For example, assume that you currently report 5 lines 
per month on your Form MMS-2014. On June 8, 2000 (7 months after the 6-
line conversion date of November 1, 1999), you lease two new producing 
properties (equivalent to 2 new lines per month). You will have 3 
months from the last day of the month in which you exceeded the 6-line 
limit--or until September 30, 2000--to begin submitting the Form MMS-
2014 electronically. MMS will continue to accept paper forms during the 
grace period.
    The two exceptions to our electronic reporting requirements 
provided in Sec. 210.22 are as follows:
     You do not have to report electronically if you report 
only rent, minimum royalty, or other annual obligations on the Form 
MMS-2014; and
     You do not have to report electronically if you are a 
small business as defined by the U.S. Small Business Administration, 
and you have no computer, no resources to purchase a computer or 
contract with an electronic reporting service, nor access to a computer 
at a local library or other public facility.
    The two exceptions to our electronic reporting requirements which 
we added to this final rule are directed primarily at small reporters 
who might suffer financial hardship if forced to comply with this rule. 
For a detailed explanation of these exceptions, see our discussion of 
small business issues under the Regulatory Flexibility Act section of 
the preamble in caption IV. Procedural Matters.

Section 216.50(a)

    We added a sentence to this paragraph to clarify that you may 
submit the Form MMS-3160 electronically.

Section 216.50(c)(1) and (2)

    We clarified that you will have a 10-day extension from the 15th to 
the 25th day of the second month following the month for which you are 
reporting if you voluntarily choose to submit the Form MMS-3160, 
Monthly Report of Operations, electronically.

Section 216.53(c)(1) and (2)

    We clarified that you will have a 10-day extension from the 15th to 
the 25th day of the second month following the month for which you are 
reporting if you submit the Form MMS-4054, Oil and Gas Operations 
Report, electronically.

Section 216.55(c)(1) and (2)

    We clarified that you will have a 10-day extension from the 15th to 
the 25th day of the second month following the month for which you are 
reporting to submit your Form MMS-4056, Gas Plant Operations Report, on 
paper if you submit the Form MMS-4054, Oil and Gas Operations Report, 
electronically.

Section 216.56(c)(1) and (2)

    We clarified that you will have a 10-day extension from the 15th to 
the 25th day of the second month following the month for which you are 
reporting to submit your Form MMS-4058, Production Allocation Schedule 
Report, on paper if you submit the Form MMS-4054, Oil and Gas 
Operations Report, electronically.

IV. Procedural Matters

Regulatory Planning and Review (Executive Order 12866)

    This document is not a significant rule and is not subject to 
review by the Office of Management and Budget under E.O. 12866. 
Generally, this rule will require many Federal and Indian mineral 
revenue and production reporters to convert from paper to electronic 
reporting by November 1, 2001. MMS uses the reports to account for and 
distribute Federal and Indian mineral revenues. This rule will not 
affect the timeliness of revenue distribution to recipients or 
information dissemination to other Federal agencies. Based on this and 
other information detailed below, we conclude:
    (1) This rule will not have an effect of $100 million or more on 
the economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities.
Governments
    This rule will have no effect on tribal governments but will have 
positive effects on the amount of revenues shared with States and 
possibly local governments. We expect net receipts sharing costs to 
States--that is, the MMS operating costs deducted from States' shares 
of royalty revenue--to decrease as MMS realizes savings from electronic 
reporting. We estimate the total annual savings to States to be

[[Page 38120]]

$33,000 in the first year and $134,000 each year thereafter.
Private Sector
    (1) This rule establishes the type of media that reporters in the 
oil and gas industry must use to report mineral revenues and production 
to MMS. We estimate that electronic reporting will generate net savings 
to industry of $1.2 million in the first year and $1.8 million each 
year thereafter;
    (2) This rule will not create a serious inconsistency or otherwise 
interfere with an action taken or planned by another agency;
    (3) This rule does not alter the budgetary effects or entitlements, 
grants, user fees, or loan programs or the rights or obligations of 
their recipients; and
    (4) This rule does not raise novel legal or policy issues.

Regulatory Flexibility Act

    In our April 8, 1998, proposed rule (63 FR 17133), we concluded 
that the rule would not have a significant economic impact on small 
businesses primarily because of the various low-cost electronic 
reporting options available to reporters. We received several public 
comments that disagreed with our conclusion. In response to those 
comments, we modified the rule substantially to minimize the negative 
impact on the largest number of small businesses and still increase the 
number of reports received electronically.
Comments Received on Small Business Impact
    One industry trade group and three companies disagreed with our 
conclusion that the impact of requiring electronic reporting for small 
reporters would not be significant. They were concerned that: (1) MMS 
was shifting data entry costs to the small reporters; (2) many 
companies do not have a computer and cannot afford to buy one or pay 
someone else to report electronically for them; and (3) this rule would 
require a significant change in the way their business is conducted.
    Additionally, the industry trade group disputed our conclusion that 
reporting electronically will reduce the reporting burden for companies 
who report only a few lines each month. The trade group believes it 
will be a costly, time-consuming burden to convert to electronic 
reporting. The industry trade group is concerned that MMS permits no 
exception to the proposed rule, especially for small lessees who are 
trying to produce from marginal wells in a time of extremely low 
prices.
    The industry trade group and one company recommended that we 
establish a reasonable threshold by number of lines or royalties paid 
per year. The industry trade group also recommended that MMS establish 
a means by which reporters could request an exemption to the rule based 
on various circumstances or hardships. One company also recommended 
that, for the few non-electronic reporters remaining, MMS reduce the 
reporting burden for both MMS and the reporter by developing an 
abbreviated paper report.
MMS Response to Comments
    It is not our intent to cause economic hardship for any small 
business by requiring electronic reporting. We devoted substantial time 
and effort to identify the possible negative economic impacts of this 
rule on small businesses and to take steps to eliminate or lessen 
adverse impacts whenever possible. The following are examples of the 
many actions we took to mitigate negative economic impacts and still 
increase the number of reports submitted electronically:
     Free software. We developed template software (see 
response to Sec. 210.20(b)(2)(i) under specific comments) primarily for 
those small companies that report only a few lines each month. We 
provide this software at no charge to reporters. If a company should 
choose to purchase a computer to use the software, the minimum software 
requirements permit the company to purchase a very inexpensive model.
    The template software is easy to install, requires no programming 
or computer expertise, and provides companies with the static or 
reference data that must be reported each month. This software also 
permits companies to save the report to a file which they can use to 
amend their report later, if necessary.
    This software has significant benefits for both MMS and industry. 
It could ultimately allow us to cease printing and mailing over 4,000 
model paper reports each month. The model contains the static or 
reference data contained in our system for each reporter. This process 
is very costly to MMS and, in many cases, companies are not using the 
model to report but only as a reference. The model report is also 
cumbersome to industry because each company must wait for the model to 
be received, complete the model with the current month's data, make 
copies, and mail the report back to MMS. With electronic reporting, 
companies can complete the report anytime during the month and easily 
amend prior reports if necessary;
     Internet filing. We are also developing an Internet 
application that will permit small companies that do not have computers 
to submit reports from remote locations, such as public libraries, 
without purchasing a computer. We anticipate this alternative to be 
available before the effective date of this rule. This alternative will 
eliminate the need to purchase a computer;
     Advice and assistance. We offer advice and assistance to 
the hundreds of small companies that currently use a computer-generated 
paper facsimile to report each month to help them transition to 
electronic reporting. Our goal is to eliminate as much data entry as 
possible for both the companies and MMS. For example, a company may 
enter data in its automated system and possibly again on its facsimile 
reports. Subsequently, MMS must manually enter the data from the paper 
copy into our system. Electronic reporting will eliminate these two 
stages of manual data entry without shifting costs. One of the 
commenting companies uses Lotus 1-2-3 for its accounting functions. The 
Lotus spreadsheet can be converted to an ASCII format (based upon an 
ASCII record layout we provide) and sent to MMS via e-mail or diskette. 
While Lotus does not offer a direct file conversion to a Comma 
Separated Values (CSV) format, a user can compose a macro that saves 
Lotus files in a CSV format. We will provide any reporter with a CSV 
and/or ASCII record layout for both production and royalty reports upon 
request;
     Elimination of the requirement to file the Form MMS-3160, 
Monthly Report of Operations, electronically. As part of our 
reengineering efforts, MMS is proposing to eliminate the Form MMS-3160 
and replace it with a revised Form MMS-4054. Consequently, we 
determined that it would not be cost effective to require reporters to 
convert to electronic reporting of the Form MMS-3160 at this time;
     Phased compliance over 2\1/4\ years. In Sec. 210.20(a), we 
established a timetable that phases the smallest reporters into 
electronic reporting over 2\1/4\ years. These extended compliance dates 
will allow additional time for small businesses to obtain computer 
equipment or contract with an electronic reporting service to comply 
with our electronic reporting requirements; and
     Exceptions to electronic reporting. In response to public 
comments, MMS will allow some exceptions to the electronic reporting 
requirements in this final rule. The exceptions at Sec. 210.22 are 
directed primarily at small reporters

[[Page 38121]]

who might suffer financial hardship if forced to comply with this rule. 
The two exceptions to electronic reporting are as follows:
    (1) You do not have to report electronically if you report only 
rent, minimum royalty, or other annual obligations on the Form MMS-
2014. This category covers reporters who submit one line per lease per 
year for any number of leases. We determined that it would not be 
economically feasible for a reporter to develop an electronic reporting 
method for this very limited reporting situation; and
    (2) You do not have to report electronically if you are a small 
business as defined by the U.S. Small Business Administration, and you 
have no computer, no resources to purchase a computer or contract with 
an electronic reporting service, nor access to a computer at a local 
library or other public facility. This exception will allow any small 
business facing severe financial hardship to continue submitting paper 
reports rather than convert to electronic reporting. Excluding these 
small payors and reporters from electronic reporting requirements will 
avoid causing undue financial hardship for the smallest companies.
    We did not choose to develop an abbreviated paper report in 
addition to the current forms as one commenter suggested because this 
action would not further our goal to eliminate paper reporting. One of 
the significant advantages of electronic reporting is that a company 
can store and submit only those data elements that are required for its 
operation. Maintaining two different reporting forms or data collection 
instruments is duplicative and confusing for MMS and reporters. In 
addition, MMS is in the process of reengineering our systems and 
attempting to reduce or modify the data elements currently required. 
However, we probably will not complete this effort for several years.
    Conclusion. Based on the numerous mitigating actions we have taken 
in response to public comments, the Department of the Interior 
certifies that this rule will not have a significant economic effect on 
a substantial number of small entities under the Regulatory Flexibility 
Act (5 U.S.C. 601 et seq.). This rule will have no effect on tribal 
governments or other small governmental jurisdictions.
    Your comments are important. The Small Business and Agriculture 
Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards were 
established to receive comments from small businesses about Federal 
agency enforcement actions. The Ombudsman will annually evaluate the 
enforcement activities and rate each agency's responsiveness to small 
business. If you wish to comment on the enforcement actions in this 
rule, call 1-888-734-3247.

Small Business Regulatory Enforcement Fairness Act (SBREFA)

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act. This rule:
    a. Does not have an annual effect on the economy of $100 million or 
more. Net revenues distributed to States may increase $33,000 in the 
first year and $134,000 each year thereafter due to cost savings 
realized by MMS through increased electronic reporting. Net savings to 
industry from converting to electronic reporting is estimated to be 
$1.2 million in the first year and $1.8 million each year thereafter.
    b. Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions. See discussion under Regulatory 
Flexibility Act.
    c. Does not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises. See 
discussion under Regulatory Flexibility Act.

Unfunded Mandates Reform Act of 1995

    This rule does not impose an unfunded mandate on State, local, or 
tribal governments or the private sector of more than $100 million per 
year. This rule does not have a significant or unique effect on State, 
local, or tribal governments or the private sector. A statement 
containing the information required by the Unfunded Mandates Reform Act 
(2 U.S.C. 1531 et seq.) is not required.
    Governments. This rule does not affect local or tribal governments. 
States that request to perform the delegable function of processing 
royalty and production reports under 30 CFR part 227 are required to 
accept multiple forms of electronic media from reporters as specified 
by MMS. States are compensated for the costs of performing delegable 
functions up to the amount it would reasonably cost MMS to perform the 
same function. We conclude that this rule would not impose an unfunded 
mandate on States.
    Private sector. This rule establishes the type of media that 
reporters in the oil and gas industry must use to report mineral 
revenues and production to MMS. We estimate net savings to industry 
from converting to electronic reporting to be $1.2 million in the first 
year and $1.8 million each year thereafter.

Takings (E.O. 12630)

    In accordance with E.O. 12630, this rule does not have significant 
takings implications. This rule does not impose conditions or 
limitations on the use of any private property; consequently, a takings 
implication assessment is not required.

Federalism (E.O. 12612)

    In accordance with Executive Order 12612, this rule does not have 
sufficient federalism implications to warrant the preparation of a 
Federalism Assessment. This rule does not impose any requirements on 
oil and gas reports submitted to States or limit State policymaking 
discretion in any way; consequently, a Federalism Assessment is not 
required.

Civil Justice Reform (E.O. 12988)

    In accordance with Executive Order 12988, the Office of the 
Solicitor has determined that this rule does not unduly burden the 
judicial system and meets the requirements of sections 3(a) and 3(b)(2) 
of the Order.

Paperwork Reduction Act

    In our April 8, 1998, proposed rule (63 FR 17133), we stated that 
this rule will reduce burden hours associated with two existing 
information collections approved by the Office of Management and Budget 
(OMB):
    (1) OMB Control Number 1010-0022, Report of Sales and Royalty 
Remittance (Form MMS-2014); and
    (2) OMB Control Number 1010-0040, Production Accounting and 
Auditing System (PAAS) Reports (Facility and Measurement Information 
Form (FMIF), Form MMS-4051; Oil and Gas Operations Report (OGOR), Form 
MMS-4054; Gas Analysis Report (GAR), Form MMS-4055; Gas Plant 
Operations Report (GPOR), Form MMS-4056; Monthly Report of Operations 
(MRO), Form MMS-3160; and Production Allocation Schedule Report (PASR), 
Form MMS-4058)].
    One industry commenter believes that if a free-form layout is 
allowed using existing spreadsheet software (for example, Microsoft 
Excel), it would take closer to the 7 minutes per line to complete the 
Form MMS-2014 (similar to the paper submission) versus 2 minutes for 
electronic reporting. The commenter believes the 2 minutes per line, 
the burden estimate we used in our OMB submission, could only be 
realized

[[Page 38122]]

if such data were systematically loaded on the spreadsheet. The 
commenter is currently submitting his adjustments on paper.
    Our estimate of 2 minutes per line is based on the assumption that 
a company is already using spreadsheet software or other automated 
options to submit its Form MMS-2014 or similar State reports. We also 
offer electronic alternatives to facilitate compatibility with a 
company's system, including submission of ASCII files on diskette or 
submission of regular reports on magnetic tape with adjustments on a 
diskette. We will work with any company to determine the simplest, most 
efficient alternative for reporting electronically.
    On May 30, 1998, OMB approved the reduction in burden which we 
estimated in the proposed rule for both of the above-referenced 
information collections (OMB Control Numbers 1010-0022 and 1010-0040). 
Both collections have an expiration date of August 31, 2001.
    As part of our continuing effort to reduce paperwork and respondent 
burden, we invite the public and other Federal agencies to comment on 
any aspect of the reporting burdens associated with these information 
collections. Submit your comments to the Office of Information and 
Regulatory Affairs, OMB, Attention Desk Officer for the Department of 
the Interior, Washington, D.C. 20503. Send copies of your comments to 
Minerals Management Service, Royalty Management Program, Rules and 
Publications Staff, P.O. Box 25165, MS 3021, Denver, Colorado 80225-
0165; courier address is Building 85, Denver Federal Center, Denver, 
Colorado 80225; e-mail address is RMP.[email protected].
    The Paperwork Reduction Act of 1995 provides that an agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information unless it displays a currently valid OMB 
control number.

National Environmental Policy Act of 1969

    This rule does not constitute a major Federal Action significantly 
affecting the quality of the human environment. A detailed statement 
under the National Environmental Policy Act of 1969 is not required.

List of Subjects

30 CFR part 210

    Coal, Continental shelf, Geothermal energy, Government contracts, 
Indian lands, Mineral royalties, Natural gas, Petroleum, Public lands--
mineral resources, Reporting and recordkeeping requirements.

30 CFR part 216

    Coal, Continental shelf, Geothermal energy, Government contracts, 
Indian lands, Mineral royalties, Natural gas, Penalties, Petroleum, 
Public lands--mineral resources, Reporting and recordkeeping 
requirements.

    Dated: June 30, 1999.
Sylvia V. Baca,
Acting Assistant Secretary--Land and Minerals Management.

    For the reasons stated in the preamble, MMS amends 30 CFR parts 210 
and 216 as follows:

PART 210--FORMS AND REPORTS

    1. The authority citation for part 210 is revised to read as 
follows:

    Authority: 5 U.S.C. 301 et seq.; 25 U.S.C. 396, 2107; 30 U.S.C. 
189, 190, 359, 1023, 1751(a); 31 U.S.C. 3716, 9701; 43 U.S.C. 1334, 
1801 et seq.; and 44 U.S.C. 3506(a).

    2. Section 210.10 paragraphs (c)(1), (c)(2), (c)(7), and (d) are 
revised to read as follows:


Sec. 210.10  Information collection.

* * * * *
    (c) * * *
    (1) MMS-2014--Used monthly to report lease-related transactions 
essential for royalty management to determine the correct royalty 
amount due, reconcile or audit data, and distribute payments to 
appropriate accounts. Public reporting burden for paper submission is 
estimated to average 7 minutes to complete each line item on the form, 
including the time necessary to assemble data, calculate value and 
royalty, and enter data on the form. Companies reporting electronically 
may average 2 minutes to complete each line item on the form. Comments 
submitted relative to this information collection should reference the 
information collection titled Report of Sales and Royalty Remittance, 
OMB Control Number 1010-0022.
    (2) MMS-3160--Used by onshore oil and gas lease operators to report 
monthly oil and gas production to MMS. Public reporting burden for 
paper submission is estimated to average 15 minutes per form, including 
the time necessary to assemble data, ensure that production and 
disposition numbers are accurate, and enter data on the form. Companies 
reporting electronically may average 7.5 minutes per month to complete 
the form. Comments submitted relative to this information collection 
should reference the information collection titled PAAS Oil and Gas 
Reports, OMB Control Number 1010-0040.
* * * * *
    (7) MMS-4054--This three-part form identifies all oil and gas lease 
production from Federal and Indian lands. MMS uses information from 
this form to track oil and gas from the point of production to the 
point of first sale or other disposition. Respondents will generally 
not use all three parts of the form. Public reporting burden for paper 
submission is estimated to average 30 minutes per month, including the 
time necessary to assemble data, ensure that production and disposition 
numbers are accurate, and enter data on the form. Companies reporting 
electronically may average 15 minutes per month to complete the form. 
Comments submitted relative to this information collection should 
reference the information collection titled PAAS Oil and Gas Reports, 
OMB Control Number 1010-0040.
* * * * *
    (d) Comments on burden estimates. Send comments on the accuracy of 
this burden estimate or suggestions on reducing this burden to the 
Information Collection Clearance Officer, MS 4230, MMS, 1849 C Street, 
NW, Washington, DC 20240 and to the Office of Management and Budget, 
Office of Information and Regulatory Affairs, Attention: Desk Officer 
for the U.S. Department of the Interior, OMB Control Number 1010-
________ (insert appropriate OMB Control Number), Washington, DC 20503. 
An agency may not conduct or sponsor, and a person is not required to 
respond to, a collection of information unless it displays a currently 
valid OMB control number.
    3. Sections 210.20-210.22 are added to subpart A to read as 
follows:


Sec. 210.20  When is electronic reporting required?

    (a) You must submit Forms MMS-2014 and MMS-4054 to MMS 
electronically. You must begin reporting electronically according to 
the following timetable unless you qualify for the exceptions to 
electronic reporting listed in Sec. 210.22:

------------------------------------------------------------------------
                                             Then, you must submit that
   If you report the following number of         form electronically
 lines each month on a required form . . .         beginning . . .
------------------------------------------------------------------------
(1) 6 or more.............................  November 1, 1999.
(2) 4-5...................................  November 1, 2000.
(3) 1-3...................................  November 1, 2001.
------------------------------------------------------------------------

    (b) See Sec. 218.40(c) for the definition of a royalty report line 
on Form MMS-2014 and Sec. 216.40(c) for the definition

[[Page 38123]]

of a production report line on Form MMS-4054; and
    (c) For purposes of this part, multiple submissions of the same 
form in one month equals one form.


Sec. 210.21  How do you report electronically?

    (a) You may use any of the following electronic media types, unless 
MMS instructs you differently:
    (1) Electronic Data Interchange (EDI) 1--The inter-
organizational, computer-to-computer exchange of structured information 
in a standard, machine-processable format;
---------------------------------------------------------------------------

    \1\  MMS has developed security measures, authentication 
procedures, and automated acknowledgments for this electronic media 
type.
---------------------------------------------------------------------------

    (2) Electronic Mail (e-mail) 1--Any communication 
service used to electronically transmit and store messages and attach 
files. MMS has three electronic file options:
    (i) Template--MMS-provided software that generates blank forms on a 
personal computer to assist companies in preparing MMS regulatory 
reports (this option is not available for Form MMS-4054);
    (ii) Comma Separated Values (CSV)--A file format where attribute 
fields are separated by commas; and
    (iii) American Standard Code for Information Interchange (ASCII)--A 
file format of fixed-length records with fixed-length attribute fields;
    (3) Reporter-Prepared Diskette (3\1/2\ inch)--A data storage medium 
used to transmit report data using one of the following file formats:
    (i) Template;
    (ii) CSV; and
    (iii) ASCII;
    (4) Magnetic or Cartridge Tape--A data storage medium used to 
transmit report data in an ASCII file format.
    (b) MMS prefers that you use the media types in the order presented 
in paragraph (a) of this section to the extent it is cost effective and 
practical. As technology changes, MMS will consider other media types 
and the order of MMS preference may change. Refer to our electronic 
commerce brochure for the most current reporting options. You can 
receive a copy of our brochure by calling your MMS representative or by 
accessing our Internet site at www.rmp.mms.gov.
    (c) Before you may begin reporting electronically:
    (1) You must submit an electronic sample of your report for MMS 
approval using the MMS-supplied electronic reporting guidelines;
    (2) MMS must notify you that your sample report has been approved;
    (3) MMS must assign you a sender identification number and security 
code for any EDI transmissions; and
    (4) MMS must assign you an originating address and compression 
software password for any e-mail transmissions.


Sec. 210.22  What are the exceptions to the electronic reporting 
requirements?

    MMS will allow the following grace periods and exceptions to the 
electronic reporting requirements in Sec. 210.20:
    (a) If you become a new MMS reporter after any of the dates you are 
required to submit electronic reports under Sec. 210.20(a), you have 3 
months from the day your first report is due to begin reporting 
electronically;
    (b) If you exceed the maximum number of lines you are allowed to 
report on paper under Sec. 210.20(a), you have 3 months from the last 
day of the month in which you exceeded the line limit to begin 
reporting electronically;
    (c) You are not required to report electronically if you report 
only rent, minimum royalty, or other annual obligations on the Form 
MMS-2014; and
    (d) You are not required to report electronically if you are a 
small business as defined by the U.S. Small Business Administration, 
and you have no computer, no resources to purchase a computer or 
contract with an electronic reporting service, nor access to a computer 
at a local library or other public facility.
    4. Section 210.52 is revised to read as follows:


Sec. 210.52  Report of sales and royalty remittance.

    (a) You must submit a completed Form MMS-2014 (Report of Sales and 
Royalty Remittance) to MMS with:
    (1) All royalty payments; and,
    (2) Rents on nonproducing leases, where specified.
    (b) When you submit Form MMS-2014 data electronically, you must not 
submit the form itself.
    (c) Completed Forms MMS-2014 for royalty payments are due by the 
end of the month following the production month.
    (d) Where applicable, completed Forms MMS-2014 for rental payments 
are due no later than the anniversary date of the lease.
    (e) This section does not prohibit you from making early payments 
voluntarily.

PART 216--PRODUCTION ACCOUNTING

    5. The authority citation for part 216 is revised to read as 
follows:

    Authority: 5 U.S.C. 301 et seq.; 25 U.S.C. 396, 2107; 30 U.S.C. 
189, 190, 359, 1023, 1751(a); 31 U.S.C. 3716, 9701; 43 U.S.C. 1334, 
1801 et seq.; and 44 U.S.C. 3506(a).

Subpart A--General Provisions

    6. Add Sec. 216.11 to subpart A to read as follows:


Sec. 216.11  Electronic reporting.

    You must submit your Oil and Gas Operations Report, Form MMS-4054, 
in accordance with electronic reporting requirements in 30 CFR part 
210.

Subpart B--Oil and Gas, General

    7. Section 216.50 is added by redesignating paragraphs (b) through 
(d) as paragraphs (f) through (h), revising paragraph (a), and adding 
new paragraphs (b) through (e) to read as follows:


Sec. 216.50  Monthly report of operations.

    (a) You must submit a Monthly Report of Operations, Form MMS-3160, 
if you operate either an onshore Federal or Indian lease or an onshore 
federally-approved agreement that contains one or more wells that are 
not permanently plugged and abandoned. You may submit Form MMS-3160 
electronically.
    (b) You must submit a Form MMS-3160 for each well for each calendar 
month, beginning with the month in which you complete drilling, unless 
you have only test production from a drilling well or MMS tells you in 
writing to do otherwise.
    (c) MMS must receive your completed Form MMS-3160 according to the 
following table:

------------------------------------------------------------------------
       If you submit your form . . .         We must receive it by . . .
------------------------------------------------------------------------
(1) Electronically........................  The 25th day of the second
                                             month following the month
                                             for which you are
                                             reporting.
(2) Other than electronically.............  The 15th day of the second
                                             month following the month
                                             for which you are
                                             reporting.
------------------------------------------------------------------------

    (d) You must continue reporting until either:
    (1) BLM approves all wells as permanently plugged or abandoned and 
you dispose of all inventory; or
    (2) The lease or agreement is terminated.
    (e) You are not required to submit Form MMS-3160 if:
    (1) You are authorized to submit an Oil and Gas Operations Report, 
Form MMS-4054, instead of a Form MMS-3160; or

[[Page 38124]]

    (2) You operate a gas storage agreement. You must report gas 
storage agreements to the appropriate BLM office.
* * * * *
    8. Section 216.53 is revised to read as follows:


Sec. 216.53  Oil and gas operations report.

    (a) You must file an Oil and Gas Operations Report, Form MMS-4054, 
if you operate one of the following that contains one or more wells 
that are not permanently plugged or abandoned:
    (1) An OCS lease or federally-approved agreement; or
    (2) An onshore Federal or Indian lease or federally-approved 
agreement for which you elected to report on a Form MMS-4054 instead of 
a Form MMS-3160.
    (b) You must submit a Form MMS-4054 for each well for each calendar 
month, beginning with the month in which you complete drilling, unless 
you have only test production from a drilling well or MMS tells you in 
writing to do otherwise.
    (c) MMS must receive your completed Form MMS-4054 according to the 
following table:

------------------------------------------------------------------------
       If you submit your form . . .         We must receive it by . . .
------------------------------------------------------------------------
(1) Electronically........................  The 25th day of the second
                                             month following the month
                                             for which you are
                                             reporting.
(2) Other than electronically.............  The 15th day of the second
                                             month following the month
                                             for which you are
                                             reporting.
------------------------------------------------------------------------

    (d) You must continue reporting until either:
    (1) BLM or MMS approves all wells as permanently plugged or 
abandoned and you dispose of all inventory; or
    (2) The lease or agreement is terminated.
    9. Section 216.55 is revised to read as follows:


Sec. 216.55  Gas plant operations report.

    (a) You must submit a Gas Plant Operations Report, Form MMS-4056, 
if you operate either:
    (1) A gas plant that processes gas originating from an OCS lease or 
federally-approved agreement before the point of final royalty 
determination; or
    (2) A gas plant that processes gas from an onshore Federal or 
Indian lease or federally-approved agreement before the point of final 
royalty determination, and MMS has asked you to submit a Form MMS-4056.
    (b) You must submit a Form MMS-4056 for each calendar month 
beginning with the month gas processing is initiated.
    (c) MMS must receive your completed Form MMS-4056 according to the 
following table:

------------------------------------------------------------------------
                                              We must receive your Form
  If you submit your Form MMS-4054 . . .          MMS-4056 by . . .
------------------------------------------------------------------------
(1) Electronically........................  The 25th day of the second
                                             month following the month
                                             for which you are
                                             reporting.
(2) Other than electronically.............  The 15th day of the second
                                             month following the month
                                             for which you are
                                             reporting.
------------------------------------------------------------------------

    (d) Your report must show 100 percent of the gas.
    (e) You are not required to file a Form MMS-4056 if:
    (1) Your plant has not processed gas that originated from a Federal 
onshore, OCS, or Indian lease, or federally-approved agreement before 
the point of final royalty determination for 6 months; and
    (2) You notified MMS in writing within 30 days after the end of the 
6-month period.
    (f) You must file a Form MMS-4056 when your plant resumes 
processing gas that originated from a Federal onshore, OCS, or Indian 
lease, or federally-approved agreement before the point of final 
royalty determination.
    10. Section 216.56 is amended by revising paragraph (b) and adding 
paragraph (c) to read as follows:


Sec. 216.56  Production allocation schedule report.

* * * * *
    (b) You must submit a Production Allocation Schedule Report, Form 
MMS-4058, for each calendar month beginning with the month in which you 
first handle production covered by this section.
    (c) MMS must receive your Form MMS-4058 according to the following 
table:

------------------------------------------------------------------------
                                              We must receive your Form
  If you submit your Form MMS-4054 . . .          MMS-4058 by . . .
------------------------------------------------------------------------
(1) Electronically........................  The 25th day of the second
                                             month following the month
                                             for which you are
                                             reporting.
(2) Other than electronically.............  The 15th day of the second
                                             month following the month
                                             for which you are
                                             reporting.
------------------------------------------------------------------------

[FR Doc. 99-18005 Filed 7-14-99; 8:45 am]
BILLING CODE 4310-MR-P