[Federal Register Volume 68, Number 144 (Monday, July 28, 2003)]
[Notices]
[Pages 44356-44360]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-19070]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service


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

AGENCY: Minerals Management Service (MMS), Interior.

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

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SUMMARY: To comply with the Paperwork Reduction Act of 1995 (PRA), we 
are notifying the public that we have submitted to OMB an information 
collection request (ICR) to renew approval of the paperwork 
requirements in the regulations under 30 CFR part 206, subpart B. This 
notice also provides the public a second opportunity to comment on the 
paperwork burden of these regulatory requirements. 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 August 27, 2003.

ADDRESSES: Submit written comments either by fax (202) 395-5806 or e-
mail ([email protected]) directly to the Office of Information 
and Regulatory Affairs, OMB, Attention: Desk Officer for the Department 
of the Interior (OMB Control Number 1010-0138). Mail or hand-carry a 
copy of your comments to Sharron L. Gebhardt, Regulatory Specialist, 
Minerals Management Service, Minerals Revenue Management, P.O. Box 
25165, MS 320B2, Denver, Colorado 80225. If you use an overnight 
courier service, our courier address is Building 85, Room A-614, Denver 
Federal Center, Denver, Colorado 80225.

FOR FURTHER INFORMATION CONTACT: Sharron L. Gebhardt, telephone (303) 
231-3211, FAX (303) 231-3781. You may also contact Sharron Gebhardt to 
obtain a copy at no cost of the regulations that require the subject 
collection of information.

SUPPLEMENTARY INFORMATION: 
    Title: ``30 CFR Part 206, Subpart B, Establishing Oil Value on 
Royalty Due on Indian Leases.''
    OMB Control Number: 1010-0138.
    Bureau Form Number: None.
    Abstract: The Department of the Interior (DOI) is 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) under the Mineral Leasing Act (30 U.S.C. 1923 and 
the OCS Lands Act (43 U.S.C. 1353) is responsible for managing the 
production of minerals from Federal and Indian lands and the OCS, 
collecting royalties from lessees who produce minerals, and 
distributing the funds collected in accordance with applicable 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.
    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 
current requirements in 30 CFR part 206, subpart B, that were 
inadvertently overlooked. This notice gives the public another 
opportunity to comment on the reporting requirements in the proposed 
and supplementary proposed rules and to also comment on the current 
requirements.
    MMS 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 adopted in March 2000 governing the valuation for 
royalty purposes of crude oil produced from Federal leases. The 
workshops, held on March 4-6, 2003, addressed, among other things, 
issues related to

[[Page 44357]]

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 reopened the comment period (68 FR 7086) for 60 
days on the proposed rule on Indian oil valuation so it can include in 
the record any relevant comments received. MMS will 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 (proposed and supplementary proposed rules)
    [sbull] 11 respondents (current regulations)
    Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 6,980 
Hours.
    [sbull] 6,680 hours (proposed and supplementary proposed rules)
    [sbull] 300 hours (current regulations)
    The following chart details the individual components and estimated 
hour burdens for the proposed rule, supplementary proposed rule, and 
the 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
----------------------------------------------------------------------------------------------------------------
                                                                                                        Annual
 Proposed 30 CFR 206,  subpart B         Reporting requirement        Burden hours   Annual  number     burden
                                                                      per response    of responses      hours
----------------------------------------------------------------------------------------------------------------
Proposed Sec.   206.52...........  You must determine the value of                2           2,700        5,400
                                    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 Number
                                    initially report and pay the                      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 audit
                                    available sales and volume data      purposes--exempt from the Paperwork
                                    for production you sold,                        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 in              400               2          800
                                    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    You may ask MMS to approve a        Burden covered under OMB Control Number
 Sec.   206.60(b)(2).               transportation allowance                          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   If an MMS-calculated                          40              12          480
 Sec.   206.61 (c)(3)(i), (ii),     differential * * * does not
 (iii), and (iv).                   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    You must report transportation      Burden covered under OMB Control Number
 Sec.   206.61(d)(4).               allowances, location                              1010-0140.
                                    differentials, and quality
                                    differentials as separate lines
                                    on Form MMS-2014.
----------------------------------
Proposed/Supplementary Proposed    You must submit information on      Burden covered under OMB Control Number
 Sec.   206.61(d)(5).               Form MMS-4416 * * * you must                      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........................  ................................  ..............           2,714        6,680
----------------------------------------------------------------------------------------------------------------


[[Page 44358]]


               Burden Hour Chart for Current Reporting Requirements in 30 CFR Part 206, Subpart B
----------------------------------------------------------------------------------------------------------------
                                                                                                        Annual
    Current 30 CFR 206, Subpart B       Reporting or recordkeeping    Burden hours    Annual number     burden
                                                requirement           per response    of responses      hours
----------------------------------------------------------------------------------------------------------------
                                               Valuation Standards
----------------------------------------------------------------------------------------------------------------
Sec.   206.52(e)(1) and (2)..........  * * * the lessee shall                    20               1           20
                                        retain 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.
Sec.   206.52(g).....................  The lessee may request a                  40               1           40
                                        value 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,        Burden covered under OMB Control Number
                                        MMS may approve a                             1010-0095.
                                        transportation 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     Burden covered under OMB Control Number
                                        a completed page one of                       1010-0061.
                                        Form 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    Burden covered under OMB Control Numbers
                                        a completed Form MMS-4110 .            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                20               1           20
                                        to 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,                20               1           20
                                        the lessee may not change
                                        methods without MMS
                                        approval.
Sec.   206.55(b)(3)(i)...............  * * * the lessee may not                  40               1           40
                                        take 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                    20               1           20
                                        liquid 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.

[[Page 44359]]

 
Sec.   206.55(b)(5)..................  A lessee may apply to MMS                 20               1           20
                                        for an exception from the
                                        requirement that it compute
                                        actual costs * * *.
                                                                    -----------------
Sec.   206.55(c)(1)(i)...............  * * * the lessee shall           Burden covered under OMB Control Number
                                        submit page one of the                        1010-0061.
                                        initial Form 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) and (iv)....  * * * lessees must submit        Burden covered under OMB Control Number
                                        page one of Form MMS-4410                     1010-0061.
                                        (and Schedule 1) within 3
                                        months after the applicable
                                        contract or rate terminates
                                        or is modified or amended,
                                        . . . MMS may require that
                                        a lessee submit arm's-
                                        length transportation
                                        contracts, production
                                        agreements, operating
                                        agreements, and related
                                        documents.
Sec.   206.55(c)(2)(i)...............  . . . the lessee shall           Burden covered under OMB Control Number
                                        submit an initial Form MMS-                   1010-0061.
                                        4110 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           Burden covered under OMB Control Number
                                        submit a completed Form                      1010- 0061.
                                        4110 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 Number
                                        facilities or arrangements,                   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 Number
                                        lessee shall submit all                       1010-0061.
                                        data used to prepare its
                                        Form MMS-4410.
Sec.   206.55(c)(4)..................  Transportation allowances        Burden covered under OMB Control Number
                                        must be reported as a                         1010-0140.
                                        separate line item on Form
                                        MMS-2014 * * *.
Sec.   206.55(e)(2)..................  For lessees transporting         Burden covered under OMB Control Number
                                        production from Indian                        1010-0140.
                                        leases, the lessee must
                                        submit a corrected Form MMS-
                                        2014 to reflect actual
                                        costs * * *.
                                                                    -----------------
    Total............................  ............................  ..............              11          300
----------------------------------------------------------------------------------------------------------------

    Estimated Annual Reporting and Recordkeeping ``Non-Hour'' Cost 
Burden: We have identified no ``non-hour'' cost burdens.
    Public Disclosure Statement: 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.
    Comments: Section 3506(c)(2)(A) of the PRA 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.
    To comply with the public consultation process, we published a 
notice in the Federal Register on February 28, 2003 (68 FR 9709), 
announcing that we would submit this ICR to OMB for approval. The 
notice provided the required 60-day comment period. We received no 
comments in response to the notice.
    If you wish to comment in response to this notice, you may send 
your comments to the offices listed under the ADDRESSES section of this 
notice. OMB has up to 60 days to approve or disapprove the information 
collection but may respond after 30 days. Therefore, to ensure maximum 
consideration, OMB should receive public comments by August 27, 2003.
    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/InfoColl/InfoColCom.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 that 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

[[Page 44360]]

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: May 23, 2003.
Cathy J. Hamilton,
Acting Associate Director for Minerals Revenue Management.
[FR Doc. 03-19070 Filed 7-25-03; 8:45 am]
BILLING CODE 4310-MR-P