[Federal Register Volume 64, Number 143 (Tuesday, July 27, 1999)]
[Notices]
[Pages 40620-40621]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19081]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service


Agency Information Collection Activities: Submitted for Office of 
Management and Budget Review; Comment Request

AGENCY: Minerals Management Service (MMS), DOI.

ACTION: Notice of Information Collection.

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SUMMARY: Under the Paperwork Reduction Act of 1995, we are soliciting 
comments on two information collections--Safety Net Report (OMB Control 
Number 1010-0103) and Certification for not Performing Accounting for 
Comparison (OMB Control Number 1010-0104)--both expire on November 30, 
1999.

FORM: MMS-4411, Safety Net Report; MMS-4410, Certification for not 
Performing Accounting for Comparison.

DATES: Written comments should be received on or before September 27, 
1999.

ADDRESSES: Comments sent via the U.S. Postal Service should be sent 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, Room A613, Denver Federal Center, 
Denver, Colorado 80225; e-mail address is RMP.[email protected].

FOR FURTHER INFORMATION CONTACT: Dennis C. Jones, Rules and 
Publications Staff, phone (303) 231-3046, FAX (303) 231-3385, e-mail 
Dennis.C.J[email protected].

SUPPLEMENTARY INFORMATION: Section 3506(c)(2)(A) of the Paperwork 
Reduction Act requires each agency ``. . . to provide notice . . . and 
otherwise consult with members of the public and affected agencies 
concerning each proposed collection of information . . . .'' Agencies 
must specifically solicit comments to: (a) Evaluate whether the 
proposed collection of information is necessary for the agency to 
perform its duties, including whether the information is useful; (b) 
evaluate the accuracy of the agency's estimate of the burden of the 
proposed collection of information; (c) enhance the quality, 
usefulness, and clarity of the information to be collected; and (d) 
minimize the burden on the respondents, including the use of automated 
collection techniques or other forms of information technology.
    The Department of the Interior (DOI) is the department within the 
Federal Government responsible for matters relevant to mineral resource 
development on Federal and Indian lands and the Outer Continental Shelf 
(OCS). The Secretary of the Interior (Secretary) is responsible for 
managing the production of minerals from Federal and Indian lands and 
the OCS; for collecting royalties from lessees who produce minerals; 
and for distributing the funds collected in accordance with applicable 
laws. MMS performs the royalty management functions for the Secretary.

OMB Control Number 1010-0103

    The safety net calculation establishes the minimum value for 
royalty purposes. This requirement will assist the Indian lessor in 
receiving all the royalties that are due and aid MMS in its compliance 
efforts. The safety net price will be calculated using prices received 
for gas sold downstream of the index point. It will include only the 
lessee's or lessee's affiliate's arm's-length contracts and will not 
require detailed calculations for the costs of transportation. By June 
30 of each calendar year, the lessee will be required to calculate for 
each month of the calendar year a safety net price. This must be 
calculated for each index zone where the lessee has an Indian lease. 
The safety net price will capture the significantly higher values for 
sales occurring beyond the first index pricing point. The lessee will 
submit its safety net price to MMS annually (by June 30) using the 
Safety Net Report, Form MMS-4411.
    The Safety Net Report will allow MMS and the tribes to ensure that 
Indian mineral lessors receive the maximum revenues from mineral 
resources on their land consistent with the Secretary's trust 
responsibility and lease terms. In the safety net calculation, the 
lessee will only include sales under those arm's-length contracts that 
establish a delivery point beyond the first index pricing point to 
which the gas flows. Moreover, those contracts must include any gas 
produced from or allocable to one or more of the lessee's

[[Page 40621]]

Indian leases in the index zone. Information provided on the form may 
be used by MMS auditors, the Royalty Valuation Division, and the Office 
of Indian Royalty Assistance.
    There are 700 companies that pay royalties on approximately 4,511 
tribal and allotted Indian leases; we estimate that 20 percent of the 
companies (140 companies) have sales beyond the first index pricing 
point. Therefore, 560 reports from 140 companies for 4 index zones will 
be required annually. We estimate that it will take a company 24 hours 
to report the data required at proposed 30 CFR 206.172(e) (reference 63 
FR 7089) and a recordkeeping burden of 1 hour per report annually. 
Therefore, we estimate that the annual burden for this information 
collection is 14,000 hours (560 reports  x  25 hours).

OMB Control Number 1010-0104

    Accounting for comparison (dual accounting) is required by the 
terms of most Indian leases when gas produced from the lease is 
processed. To not perform dual accounting, a lessee must certify, on 
Form MMS-4410, Certification For Not Performing Accounting For 
Comparison, that the gas was never processed prior to entering the 
pipeline with an index located in an index zone or into a mainline 
pipeline not in an index zone. The lessee will be required to sign the 
certification form for each lease having production that is exempt from 
dual accounting. This is a one-time certification that will remain in 
effect until there is a change in lease status or ownership. This 
certification will allow MMS and the tribes to better monitor 
compliance with the dual accounting requirement of Indian leases.
    In most cases, the lessee will directly know the disposition of the 
gas. If gas is sold at the wellhead, the lessee may have to consult 
with the purchaser of the gas to determine its disposition. Information 
provided on the form may be used by MMS auditors, the Royalty Valuation 
Division, and the Office of Indian Royalty Assistance.
    There are approximately 4,511 tribal and allotted Indian leases and 
700 payors comprising the Indian lease universe. We estimate that 30 
percent of the Indian leases, or 1,353 leases, would not require 
accounting for comparison. A certification form will be required for 
each lease, and the certification will remain in effect until there is 
a change in lease status or ownership. This one-time filing as required 
by proposed 30 CFR 206.172(b)(ii) (reference 63 FR 7089) will require 3 
hours per certification report to extract the data from company records 
or obtain the information from the purchasers and a recordkeeping 
burden of 1 hour per report annually. Therefore, we estimate that the 
total annual burden for this information collection is 5,412 hours 
(1,353 reports  x  4 hours).

    Dated: July 21, 1999.
Joan Killgore,
Acting Associate Director for Royalty Management.
[FR Doc. 99-19081 Filed 7-26-99; 8:45 am]
BILLING CODE 4310-MR-P