[Federal Register Volume 69, Number 201 (Tuesday, October 19, 2004)]
[Notices]
[Pages 61519-61522]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-23303]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service


Agency Information Collection Activities: Proposed Collection, 
Comment Request

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Notice of a revision of a currently approved information 
collection (OMB control number 1010-0107).

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SUMMARY: To comply with the Paperwork Reduction Act of 1995 (PRA), we 
are inviting comments on a collection of information that we will 
submit to the Office of Management and Budget (OMB) for review and 
approval. We changed the title of this information collection request 
(ICR) to clarify the regulatory language we are covering under 30 CFR 
part 218. The previous title of this ICR was ``30 CFR part 218, subpart 
B--Oil and Gas, General.'' The new title of this ICR is ``30 CFR part 
218, subpart A--General Provisions, Sec.  218.42 Cross-lease netting in 
calculation of late-payment interest; subpart B--Oil and Gas, General, 
Sec.  218.52 How does a lessee designate a Designee? (Form MMS-4425, 
Designation Form for Royalty Payment Responsibility) and Sec.  218.53

[[Page 61520]]

Recoupment of overpayments on Indian mineral leases; and subpart E--
Solid Minerals--General, Sec.  218.203 Recoupment of overpayments on 
Indian mineral leases.''

DATES: Submit written comments on or before December 20, 2004.

ADDRESSES: Submit written comments to Sharron L. Gebhardt, Lead 
Regulatory Specialist, Minerals Management Service, Minerals Revenue 
Management, P.O. Box 25165, MS 302B2, 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. You may also 
e-mail your comments to us at [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 that 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) 231-3781, or e-mail [email protected].

SUPPLEMENTARY INFORMATION: Title: 30 CFR part 218, subpart A--General 
Provisions, Sec.  218.42 Cross-lease netting in calculation of late-
payment interest; subpart B--Oil and Gas, General, Sec.  218.52 How 
does a lessee designate a Designee? (Form MMS-4425, Designation Form 
for Royalty Payment Responsibility) and Sec.  218.53 Recoupment of 
overpayments on Indian mineral leases; and subpart E--Solid Minerals--
General, Sec.  218.203 Recoupment of overpayments on Indian mineral 
leases.
    OMB Control Number: 1010-0107.
    Bureau Form Number: Form MMS-4425.
    Abstract: The Secretary of the U.S. Department of the Interior 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. The MMS performs the royalty management 
functions and assists the Secretary in carrying out the Department's 
Indian trust responsibility.
    When a company or an individual enters into a lease to explore, 
develop, produce, and dispose of minerals from Federal or Indian lands, 
that company or individual agrees to pay the lessor a share (royalty) 
of the value received from production from the leased lands. The lease 
creates a business relationship between the lessor and the lessee. The 
lessee is required to report various kinds of information to the lessor 
relative to the disposition of the leased minerals. Such information is 
similar to data reported to private and public mineral interest owners 
and is generally available within the records of the lessee or others 
involved in developing, transporting, processing, purchasing, or 
selling of such minerals. The information collected includes data 
necessary to ensure that the royalties are paid appropriately.
    This ICR includes unique reporting circumstances including 
designation of designee, cross-lease netting in calculation of late-
payment interest, and tribal permission for recoupment on Indian 
leases.

Applicable Public Laws

    Applicable citations of the laws pertaining to mineral leases 
include Public Law 97-451--Jan. 12, 1983 (Federal Oil and Gas Royalty 
Management Act of 1982 [FOGRMA]), Public Law 104-185--Aug. 13, 1996 
(Federal Oil and Gas Royalty Simplification and Fairness Act of 1996 
[RFSA]) as corrected by Public Law 104-200--Sept. 22, 1996), and the 
Indian Mineral Development Act of 1982 (25 U.S.C. 2101 et seq.). Public 
laws pertaining to mineral royalties are located on our Web site at 
http://www.mrm.mms.gov/Laws_R_D/PublicLawsAMR.htm.

Designation of Designee

    The RSFA established that owners of, primarily, operating rights 
or, secondarily, lease record title (both referred to as ``lessees'') 
are responsible for making royalty and related payments on Federal oil 
and gas leases. These RSFA requirements were promulgated in regulations 
at 30 CFR 218.52. It is common, however, for a payor rather than a 
lessee to make these payments. When a payor makes payments on behalf of 
a lessee, RSFA section 6(g) requires that the lessee designate the 
payor as its designee and notify MMS of this arrangement in writing. 
The MMS designed Form MMS-4425, Designation Form for Royalty Payment 
Responsibility, to request all the information necessary for lessees to 
comply with these RSFA requirements when they choose to designate an 
agent to pay for them. The MMS requires this information to ensure 
proper mineral revenue collection.

Cross-Lease Netting in Calculation of Late-Payment Interest

    Regulations at 30 CFR 218.54 require MMS to assess interest on 
unpaid or underpaid amounts. The MMS distributes these interest 
revenues to states, Indians, and the U.S. Treasury, based on financial 
lease distribution information. Current regulations at 30 CFR 218.42 
provide that an overpayment on a lease or leases may be offset against 
an underpayment on a different lease or leases to determine the net 
payment subject to interest, when certain conditions are met. This is 
called cross-lease netting.
    However, RSFA sections 6(a), (b), and (c) require MMS to pay 
interest on lessees' Federal oil and gas overpayments made on or after 
the February 13, 1997, enactment of RSFA. The MMS implemented this RSFA 
provision in 1997, and began calculating interest on both underpayments 
and overpayments for Federal oil and gas leases, making the cross-lease 
netting provisions at 30 CFR 218.42 no longer applicable for these 
leases. The MMS is currently developing regulations to amend 30 CFR 
218.42 to limit its applicability to payments made under Indian tribal 
leases and Federal leases for minerals other than oil and gas. The MMS 
estimates that in about 7 cases per year, lessees must comply with the 
provisions of 30 CFR 218.42(b) and (c) for Indian tribal leases or 
Federal leases other than oil and gas, demonstrating that cross-lease 
netting is correct by submitting production reports, pipeline 
allocation reports, or other similar documentary evidence. This 
information is necessary for MMS to determine the correct amount of 
interest owed by the lessee, and to ensure proper value is collected.

Tribal Permission for Recoupment on Indian Leases

    In order to report cross-lease netting on Indian leases, lessees 
must also comply with regulations at 30 CFR 218.53(b) and 218.203(b), 
allowing only lessees with written permission from the tribe to recoup 
overpayments on one lease against a different lease for which the tribe 
is the lessor. The payor must furnish MMS with a copy of the tribe's 
written permission. Generally, a payor may recoup an overpayment 
against the current month's royalties or other revenues owed on the 
same tribal lease. For any month, a payor may not recoup more than 50 
percent of the royalties or other revenues owed in that month under an 
individual allotted lease or

[[Page 61521]]

more than 100 percent of the royalties or other revenues owed in that 
month under a tribal lease. Lessees use Form MMS-2014, Report of Sales 
and Royalty Remittance, for oil and gas lease recoupments (burden 
covered under ICR 1010-0140, expires October 31, 2006) and Form MMS-
4430, Solid Mineral Production and Royalty Report, for solid mineral 
lease recoupments (burden covered under ICR 1010-0120, expires October 
31, 2007). The MMS requires tribal permission to ensure tribes and 
individual Indian mineral owners receive correct revenues from 
production on their leases.
    Frequency: On occasion.
    Estimated Number and Description of Respondents: 1,613 Federal and 
Indian lessees.
    Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 1,220 
hours.
    The following chart shows the estimated burden hours by CFR section 
and paragraph:

                                   Respondents' Estimated Annual Burden Hours
----------------------------------------------------------------------------------------------------------------
                                                                                      Average
                                  Reporting and recordkeeping                        number of    Annual  burden
     Citation 30 CFR 218                  requirement               Hour burden       annual           hours
                                                                                     responses
----------------------------------------------------------------------------------------------------------------
           Subpart A--General Provisions--Cross-lease netting in calculation of late-payment interest.
----------------------------------------------------------------------------------------------------------------
218.42(b) and (c)             Cross-lease netting in calculation            2                  7               4
                               of late-payment interest. (b)
                               Royalties attributed to
                               production from a lease or leases
                               which should have been attributed
                               to production from a different
                               lease or leases may be offset * *
                               * if * * * the payor submits
                               production reports, pipeline
                               allocation reports, or other
                               similar documentary evidence
                               pertaining to the specific
                               production involved which
                               verifies the correct production
                               information * * *.
                              (c) If MMS assesses late-payment    ..............  ..............  ..............
                               interest and the payor asserts
                               that some or all of the interest
                               assessed is not owed * * * the
                               burden is on the payor to
                               demonstrate that the exception
                               applies * * *.
-----------------------------
                    Subpart B--Oil and Gas, General--How does a lessee designate a Designee?
----------------------------------------------------------------------------------------------------------------
218.52 (a), (c), and (d)      How does a lessee designate (a) If            0.75           1,600           1,200
                               you are a lessee under 30 U.S.C.
                               1701(7), and you want to
                               designate a person to make all or
                               part of the payments due under a
                               lease on your behalf * * * you
                               must notify MMS * * * in writing
                               of such designation * * *.
                              (c) If you want to terminate a
                               designation * * * you must
                               provide [the following] to MMS in
                               writing * * *..
                              (d) MMS may require you to provide  ..............  ..............  ..............
                               notice when there is a change in
                               the percentage of your record
                               title or operating rights
                               ownership.
 
                              Note:The MMS currently uses Form    ..............  ..............  ..............
                               MMS-4425, Designation Form for
                               Royalty Payment Responsibility to
                               collect this information.
-----------------------------
              Subpart B--Oil and Gas, General--Recoupment of overpayments on Indian mineral leases.
----------------------------------------------------------------------------------------------------------------
218.53(b)                     Recoupment of overpayments on                 1                  5               5
                               Indian mineral leases. (b) With
                               written permission authorized by
                               tribal statute or resolution, a
                               payor may recoup an overpayment
                               against royalties or other
                               revenues owed * * * under other
                               leases * * *. A copy of the
                               tribe's written permission must
                               be furnished to MMS * * *.
-----------------------------
            Subpart E--Solid Minerals--General--Recoupment of overpayments on Indian mineral leases.
----------------------------------------------------------------------------------------------------------------
218.203(b)                    Recoupment of overpayments on                 1                  1               1
                               Indian mineral leases. (b) With
                               written permission authorized by
                               tribal statute or resolution, a
                               payor may recoup an overpayment
                               against royalties or other
                               revenues owed in that month under
                               other leases for which that tribe
                               is the lessor. A copy of the
                               tribe's written permission must
                               be furnished to MMS * * *
                               [following] instructions * * *.
                                                                 -----------------
Total Burden                  ..................................  ..............           1,613           1,220
----------------------------------------------------------------------------------------------------------------

    We are revising this ICR to cover regulations at 30 CFR 218.42 (b) 
and (c), Cross-Lease Netting in Calculation of Late-Payment Interest 
and 30 CFR 218.203(b), Recoupment of Overpayments on Indian Mineral 
Leases. Previously addressed burden hours for 30 CFR 218.57 are 
currently covered in ICR 1010-0120 (expires October 31, 2007).
    Estimated Annual Reporting and Recordkeeping ``Non-hour Cost'' 
Burden: We have identified no ``non-hour cost'' burdens.
    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

[[Page 61522]]

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, and 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. The ICR also will 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 also will 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. Upon request, we will withhold an individual respondent's 
home address from the public record, as 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 your request 
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: Arlene Bajusz (202) 
208-7744.

    Dated: October 12, 2004.
Cathy J. Hamilton,
Acting Associate Director for Minerals Revenue Management.
[FR Doc. 04-23303 Filed 10-18-04; 8:45 am]
BILLING CODE 4310-MR-P