[Federal Register Volume 68, Number 40 (Friday, February 28, 2003)]
[Notices]
[Pages 9709-9712]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-4904]


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

DEPARTMENT OF THE INTERIOR

Minerals Management Service


Agency Information Collection Activities: Proposed Collection, 
Comment Request

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Notice of an extension and revision of a currently approved 
information collection (OMB Control Number 1010-0138).

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

SUMMARY: To comply with the Paperwork Reduction Act (PRA) of 1995, we 
are inviting comments on an information collection request (ICR) that 
we will submit to the Office of Management and Budget (OMB) for review 
and approval. The ICR is titled ``30 CFR part 206, Subpart B, 
Establishing Oil Value on Royalty Due on Indian Leases''.

DATES: Submit written comments on or before April 29, 2003.

ADDRESSES: Submit written comments directly to Sharron L. Gebhardt, 
Regulatory Specialist, Minerals Mangement Service, Minerals Revenue 
Management, P.O. Box 25165, MS 320B2, Denver, CO, 80225. If you use 
overnight courier, the address is Building 85, Room A614, Denver 
Federal Center, Denver, Colorado 80225. You may also email your 
comments to [email protected]. Include the title of the information 
collection and the OMB control number in the ``Attention'' line of your 
comment. Also include your name and return address. Submit electronic 
comments as an ASCII file avoiding the use of special characters and 
any form of encryption. If you do not receive a confirmation we have 
received your e-mail, contact Ms. Gebhardt at (303) 231-3211.

FOR FURTHER INFORMATION CONTACT: Sharron L. Gebhardt, telephone (303) 
231-3211, FAX (303) 231-3385, e-mail [email protected].

SUPPLEMENTARY INFORMATION:
    Title: 30 CFR Part 206 Subpart B, Establishing Oil Value on Royalty 
Due on Indian Leases.
    OMB Control Number: 1010-0138.
    Abstract: The Secretary of the U.S. Department of the Interior 
(DOI) is responsible for collecting royalties from lessees who produce 
minerals from leased Federal and Indian lands. The Secretary is 
required by various laws to manage mineral resources production on 
Federal and Indian lands, collect the royalties due, and distribute the 
funds in accordance with those laws. The Secretary also has an Indian 
Trust responsibility to manage Indian lands and seek advice and 
information from Indian beneficiaries. MMS performs the royalty 
management functions and assists the Secretary in carrying out DOI's 
Indian trust responsibility.
    On December 20, 1995, MMS published an Advance Notice of Proposed 
Rulemaking (60 FR 65610) regarding valuation of oil from Federal and 
Indian leases. In the notice, we asked all interested parties to submit 
and/or comment on alternate methodologies for valuing oil production. 
Additionally, we asked for comments related to ``significant 
quantities'' in valuation determinations.
    Although industry generally had no comments due to pending 
litigation on this issue, many States and Indian organizations 
generally believed the current system is outdated and a new system 
based on either the New York Mercantile Exchange (NYMEX) or spot prices 
would be more appropriate. In response to these concerns, we published 
a proposed rule on February 12, 1998 (63 FR 7089), revising the current 
Indian oil valuation regulations. This proposed rule ``Establishing Oil 
Value for Royalty Due on Indian Leases,'' added more certainty to 
valuation of oil produced from Indian lands and eliminated any direct 
reliance on posted prices.
    Then, MMS proposed further changes to its proposed rule regarding 
the valuation, for royalty purposes, of crude oil produced from Indian 
leases by publishing a supplementary proposed rule on January 5, 2000 
(65 FR 403).
    This supplementary proposed rule established a new form--Form MMS-
4416, Indian Crude Oil Valuation Report, for collecting value and value 
differential data. OMB approved the use of this proposed Form MMS-4416 
and assigned OMB Control Number 1010-0113. Currently, MMS is seeking 
OMB's approval to renew the reporting requirements for this form until 
a final rule is published.
    MMS is now requesting OMB to renew its approval for the reporting 
requirements under the proposed and supplementary proposed rules until 
a final rule is published. We are also seeking OMB's approval for the 
existing requirements in 30 CFR part 206, Subpart B, that were 
overlooked. This notice gives the public an opportunity to comment on 
the reporting requirements in the proposed and supplementary proposed 
rules that OMB approved on February 2, 2000, and to also comment on the 
existing requirements that were inadvertently overlooked and not 
included in an OMB-approved ICR.
    MMS has announced in the Federal Register on February 12, 2003 (68 
FR 7086), the dates, places, and times for workshops on issues related 
to the existing rules published March 15, 2000, effective June 1, 2000, 
governing the valuation for royalty purposes of crude oil produced from 
Federal leases. The workshops will address, among other things, issues 
related to calculation of transportation allowances (including the rate 
of return allowed for calculating actual costs under non-arm's-length 
transportation arrangements), timing and application of published index 
prices, and calculation of location and quality differentials under 
certain circumstances.
    Because of the substantive overlap between these issues and issues 
involved in the proposed rule on Indian oil valuation, and to give 
persons interested in Indian lease issues an opportunity to participate 
in the workshops, MMS is reopening the comment period for 60 days on 
the proposed rule on Indian oil valuation so it can include in the 
record any relevant comments received. MMS can then consider those 
comments as they might apply to the Indian oil valuation rule.
    Frequency of Response: Annually and monthly.
    Estimated Number and Description of Respondents: 236 Companies 
paying royalties on oil produced from tribal and allotted Indian 
leases.
    [sbull] 225 respondents under proposed and supplementary proposed 
rules, and
    [sbull] 11 respondents under current regulations.
    Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 6,980 
Hours
    [sbull] 6,680 hours under proposed and supplementary proposed 
rules, and
    [sbull] 300 hours under current regulations.
    Estimated Annual Reporting and Recordkeeping ``Non-Hour'' Cost 
Burden: We have identified no ``non-hour'' cost burdens.
    The following chart details the individual components and estimated 
hour burdens for the proposed rule, supplementary proposed rule, and 
the

[[Page 9710]]

current reporting requirements under 30 CFR part 206, Subpart B. In 
calculating the burdens, we assumed that respondents perform certain 
requirements in the normal course of their activities. Therefore, we 
consider these to be usual and customary and took that into account in 
estimating the burden.

                Burden Hour Chart for Proposed and Supplementary Proposed Reporting Requirements
----------------------------------------------------------------------------------------------------------------
                                                                              Burden       Annual       Annual
      Proposed 30 CFR 206, subpart B            Reporting requirement       hours per    number of      burden
                                                                             response    responses      hours
----------------------------------------------------------------------------------------------------------------
Proposed Sec.   206.52...................  You must determine the value              2        2,700        5,400
                                            of oil using the method that
                                            yields the highest value.
Proposed Sec.   206.52(d)................  On Form MMS-2014, you must      Burden covered under OMB Control
                                            initially report and pay the   Number 1010-0140.
                                            value of production at the
                                            higher of the index-based or
                                            gross proceeds-based values *
                                            * * You must file this report
                                            * * * you must submit an
                                            amended Form MMS-2014 with
                                            the higher value within 30
                                            days after you receive notice
                                            from MMS of the major portion
                                            value.
Proposed Sec.   206.53(a) and (b)........  On request, you must make       Normal records retention for targeted
                                            available sales and volume     audit purposes--exempt from the
                                            data for production you sold,  Paperwork Reduction Act.
                                            purchased, or obtained from
                                            the designated area or from
                                            nearby fields or areas * * *
                                            You must make this data
                                            available to the authorized
                                            MMS * * *. You must retain
                                            all data relevant to the
                                            determination of royalty
                                            value.
Proposed Sec.   206.54...................  You may ask MMS for guidance            400            2          800
                                            in determining value. You may
                                            propose a value method to
                                            MMS. Submit all available
                                            data related to your proposal
                                            and any additional
                                            information MMS deems
                                            necessary.
Proposed/Supplementary Proposed Sec.       You may ask MMS to approve a    Burden covered under OMB Control
 206.60(b)(2).                              transportation allowance       Number 1010-0095
                                            deduction * * * You must
                                            demonstrate that the
                                            transportation costs incurred
                                            were reasonable, actual, and
                                            necessary. Your application
                                            for exception (using Form MMS-
                                            4393, Request to Exceed
                                            Regulatory Allowance
                                            Limitation) must contain all
                                            relevant supporting
                                            documentation * * *.
Proposed/Supplementary Proposed Sec.       If an MMS-calculated                     40           12          480
 206.61 (c)(3)(i), (ii), (iii), and (iv).   differential * * * does not
                                            apply to your oil, either due
                                            to location or quality
                                            differences, you must request
                                            MMS to calculate a
                                            differential for you * * *
                                            After MMS publishes its
                                            annual listing of location/
                                            quality differentials, you
                                            must file your request in
                                            writing with MMS for an MMS-
                                            calculated differential. You
                                            must demonstrate why the
                                            published differential does
                                            not adequately reflect your
                                            circumstances. * * * If you
                                            file a request for an MMS-
                                            calculated differential
                                            within 30 days after MMS
                                            publishes its annual listing
                                            of location/quality
                                            differentials, * * * Send
                                            your request to: Minerals
                                            Management Service * * *.
Proposed/Supplementary Proposed Sec.       You must report transportation  Burden covered under OMB Control
 206.61(d)(4).                              allowances, location           Number 1010-0140.
                                            differentials, and quality
                                            differentials as separate
                                            lines on Form MMS-2014.
Proposed/Supplementary Proposed Sec.       You must submit information on  Burden covered under OMB Control
 206.61(d)(5).                              Form MMS-4416 * * * you must   Number 1010-0113.
                                            file a new form each time you
                                            execute a new exchange or
                                            sales contract involving the
                                            production of oil from an
                                            Indian lease.
Total....................................                                                      2714        6,680
----------------------------------------------------------------------------------------------------------------


               Burden Hour Chart for Existing Reporting Requirements in 30 CFR Part 206, Subpart B
----------------------------------------------------------------------------------------------------------------
                                                                              Burden       Annual       Annual
      Current 30 CFR 206, subpart B          Reporting or recordkeeping     hours per    number of      burden
                                                     requirement             response    responses      hours
----------------------------------------------------------------------------------------------------------------
                                               Valuation Standards
----------------------------------------------------------------------------------------------------------------
Sec.   206.52(e)(1) and (2)..............  * * * the lessee shall retain            20            1           20
                                            all data relevant to the
                                            determination of royalty
                                            value * * * A lessee shall
                                            notify MMS if it has
                                            determined value * * * The
                                            notification shall be by
                                            letter to MMS * * * The
                                            letter shall identify the
                                            valuation method to be used
                                            and contain a brief
                                            description of the procedure
                                            to be followed.

[[Page 9711]]

 
Sec.   206.52(g).........................  The lessee may request a value           40            1           40
                                            determination from MMS * * *
                                            the lessee shall propose to
                                            MMS a value determination
                                            method * * * The lessee shall
                                            submit all available data
                                            relevant to its proposal.
------------------------------------------
                                            Transportation Allowances
----------------------------------------------------------------------------------------------------------------
Sec.   206.54(b)(2)......................  Upon request of a lessee, MMS   Burden covered under OMB Control
                                            may approve a transportation   Number 1010-0095.
                                            allowance deduction * * * The
                                            lessee must demonstrate that
                                            the transportation costs
                                            incurred in excess of the
                                            limitation * * * were
                                            reasonable, actual, and
                                            necessary. An application for
                                            exception (using Form MMS-
                                            4393, Request to Exceed
                                            Regulatory Allowance
                                            Limitation) shall contain all
                                            relevant and support
                                            documentation necessary for
                                            MMS to make a determination.
Sec.   206.55(a)(1)(i)...................  * * * the lessee must submit a  Burden covered under OMB Control
                                            completed page one of Form     Number 1010-0061.
                                            MMS-4110 (and Schedule 1),
                                            Oil Transportation Allowance
                                            Report, * * *.
Sec.   206.55(a)(2)(i)...................  * * * no allowance may be                40            1           40
                                            taken for the costs of
                                            transporting lease production
                                            which is not royalty bearing
                                            without MMS approval.
Sec.   206.55(a)(2)(ii)..................  * * * the lessee may propose             20            1           20
                                            to MMS a cost allocation
                                            method on the basis of the
                                            values of the products
                                            transported.
Sec.   206.55(a)(3)......................  If an arm's-length                       40            1           40
                                            transportation contract
                                            includes both gaseous and
                                            liquid products, and the
                                            transportation costs
                                            attributable to each product
                                            cannot be determined from the
                                            contract, the lessee shall
                                            propose an allocation
                                            procedure to MMS * * * The
                                            lessee shall submit all
                                            available data to support its
                                            proposal.
Sec.   206.55(b)(1)......................  * * * the lessee must submit a  Burden covered under OMB Control
                                            completed Form MMS-4110 * * *  Numbers 1010-0061 and 1010-0140.
                                            A transportation allowance
                                            may be claimed retroactively
                                            for a period of not more than
                                            3 months prior to the first
                                            day of the month that Form
                                            MMS-4110 is filed with MMS *
                                            * * MMS may direct a lessee
                                            to modify its actual
                                            transportation allowance
                                            deduction.
Sec.   206.55(b)(2)(iv)..................  After a lessee has elected to            20            1           20
                                            use either method for a
                                            transportation system, the
                                            lessee may not later elect to
                                            change to the other
                                            alternative without approval
                                            of MMS.
Sec.   206.55(b)(2)(iv)(A)...............  After an election is made, the           20            1           20
                                            lessee may not change methods
                                            without MMS approval.
Sec.   206.55(b)(3)(i)...................  * * * the lessee may not take            40            1           40
                                            an allowance for transporting
                                            lease production which is not
                                            royalty bearing without MMS
                                            approval.
Sec.   206.55(b)(3)(ii)..................  * * * the lessee may propose             20            1           20
                                            to MMS a cost allocation
                                            method on the basis of the
                                            values of the products
                                            transported.
Sec.   206.55(b)(4)......................  Where both gaseous and liquid            20            1           20
                                            products are transported
                                            through the same
                                            transportation system, the
                                            lessee shall propose a cost
                                            allocation procedure to MMS *
                                            * * The lessee shall submit
                                            all available data to support
                                            its proposal.
Sec.   206.55(b)(5)......................  A lessee may apply to MMS for            20            1           20
                                            an exception from the
                                            requirement that it compute
                                            actual costs * * *.
Sec.   206.55(c)(1)(i)...................  * * * the lessee shall submit   Burden covered under OMB Control
                                            page one of the initial Form   Number 1010-0061.
                                            MMS-4110 (and Schedule 1),
                                            Oil Transportation Allowance
                                            Report, prior to, or at the
                                            same time as, the
                                            transportation allowance
                                            determined, under an arm's-
                                            length contract, is reported
                                            on Form MMS-2014, Report of
                                            Sales and Royalty Remittance.
Sec.   206.55(c)(1)(iii).................  * * * lessees must submit page  Burden covered under OMB Control
                                            one of Form MMS-4410 (and      Number 1010-0061.
                                            Schedule 1) within 3 months
                                            after the applicable contract
                                            or rate terminates or is
                                            modified or amended, * * *.

[[Page 9712]]

 
Sec.   206.55(c)(2)(i)...................  * * * the lessee shall submit   Burden covered under OMB Control
                                            an initial Form MMS-4110       Number 1010-0061.
                                            prior to, or at the same time
                                            as, the transportation
                                            allowance determined under a
                                            non-arm's-length contract or
                                            no-contract situation is
                                            reported on Form MMS-2014 * *
                                            *.
Sec.   206.55(c)(2)(iii).................  * * * the lessee shall submit   Burden covered under OMB Control
                                            a completed Form 4110          Number 1010-0061.
                                            containing the actual costs
                                            for the previous reporting
                                            period * * * the lessee shall
                                            include on Form MMS-4110 its
                                            estimated costs for the next
                                            calendar year * * * MMS must
                                            receive the Form MMS-4110
                                            within 3 months after the end
                                            of the previous reporting
                                            period * * *.
Sec.   206.55(c)(2)(iv)..................  For new transportation          Burden covered under OMB Control
                                            facilities or arrangements,    Number 1010-0061.
                                            the lessee's initial Form MMS-
                                            4110 shall include estimates
                                            of the allowable oil
                                            transportation costs for the
                                            applicable period.
Sec.   206.55(c)(2)(vi)..................  Upon request by MMS, the        Burden covered under OMB Control
                                            lessee shall submit all data   Number 1010-0061.
                                            used to prepare its Form MMS-
                                            4410.
Sec.   206.55(c)(4)......................  Transportation allowances must  Burden covered under OMB Control
                                            be reported as a separate      Number 1010-0140.
                                            line item on Form MMS-2014 *
                                            * *.
Sec.   206.55(e)(2)......................  For lessees transporting        Burden covered under OMB Control
                                            production from Indian         Number 1010-0140.
                                            leases, the lessee must
                                            submit a corrected Form MMS-
                                            2014 to reflect actual costs
                                            * * *.
                                                                                 Total           11          300
----------------------------------------------------------------------------------------------------------------

    Comments: The PRA (44 U.S.C. 3501, et seq.) 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. Before submitting an ICR to OMB, PRA section 
3506(c)(2)(A) 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 PRA also requires agencies to estimate the total annual 
reporting ``non-hour cost'' burden to respondents or recordkeepers 
resulting from the collection of information. We have not identified 
non-hour cost burdens for this information collection. If you have 
costs to generate, maintain, and disclose this information, you should 
comment and provide your total capital and startup cost components or 
annual operation, maintenance, and purchase of service components. You 
should describe the methods you use to estimate major cost factors, 
including system and technology acquisition, expected useful life of 
capital equipment, discount rate(s), and the period over which you 
incur costs. Capital and startup costs include, among other items, 
computers and software you purchase to prepare for collecting 
information; monitoring, sampling, testing equipment; and record 
storage facilities. Generally, your estimates should not include 
equipment or services purchased: (i) Before October 1, 1995; (ii) to 
comply with requirements not associated with the information 
collection; (iii) for reasons other than to provide information or keep 
records for the Government; or (iv) as part of customary and usual 
business or private practices.
    We will summarize written responses to this notice and address them 
in our ICR submission for OMB approval, including appropriate 
adjustments to the estimated burden. We will provide a copy of the ICR 
to you without charge upon request and the ICR will also be posted on 
our Web site at http://www.mrm.mms.gov/Laws_R_D/FRNotices/FRInfColl.htm.
    Public Comment Policy: We will post all comments in response to 
this notice on our Web site at http://www.mrm.mms.gov/Laws_R_D/FRNotices/FRInfColl.htm. We will also make copies of the comments 
available for public review, including names and addresses of 
respondents, during regular business hours at our offices in Lakewood, 
Colorado. Individual respondents may request we withhold their home 
address from the public record, which we will honor to the extent 
allowable by law. There also may be circumstances in which we would 
withhold from the rulemaking record a respondent's identity, as 
allowable by law. If you request that we withhold your name and/or 
address, state this prominently at the beginning of your comment. 
However, we will not consider anonymous comments. We will make all 
submissions from organizations or businesses, and from individuals 
identifying themselves as representatives or officials of organizations 
or businesses, available for public inspection in their entirety.
    MMS Information Collection Clearance Officer: Jo Ann Lauterbach 
(202) 208-7744.

    Dated: February 26, 2003.
Cathy J. Hamilton,
Acting Associate Director for Minerals Revenue Management.
[FR Doc. 03-4904 Filed 2-27-03; 8:45 am]
BILLING CODE 4310-MR-P