[Federal Register Volume 69, Number 201 (Tuesday, October 19, 2004)]
[Notices]
[Pages 61522-61526]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-23304]


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

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 of a currently approved information 
collection (OMB Control Number 1010-0122).

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

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 243. The previous title of this ICR was ``30 CFR Part 243 
Suspensions Pending Appeal and Bonding (formerly Filing Sureties).'' 
The new title of this ICR is ``30 CFR Part 243, Suspensions Pending 
Appeal and Bonding--Minerals Revenue Management (Forms MMS-4435, 
Administrative Appeal Bond, and MMS-4436, Letter of Credit).''

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 243, Suspensions Pending Appeal and Bonding--
Minerals Revenue Management (Forms MMS-4435, Administrative Appeal 
Bond, and MMS-4436, Letter of Credit).
    OMB Control Number: 1010-0122.
    Bureau Form Number: Forms MMS-4435 and MMS-4436.
    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 MMS performs the royalty management 
functions for the Secretary.
    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. Proprietary 
information submitted to MMS under the collection is protected.

Stay of Payment Pending Appeal

    Lessees or recipients of MMS's Minerals Revenue Management (MRM) 
orders may suspend compliance with an order if they appeal in 
accordance with 30 CFR 290, Subpart B. Pending appeal, MMS suspends the 
payment requirement if the appellant submits a formal agreement of 
payment in case of default, such as a bond or other surety. The MMS 
accepts the following surety types: Form MMS-4435, Administrative 
Appeal Bond; Form MMS-4436, Letter

[[Page 61523]]

of Credit; Self-bonding; Certificate of Deposit; and U.S. Treasury 
Securities.
    When one of the surety types is selected and put in place, 
appellants must maintain the surety until completion of the appeal. If 
the appeal is decided in favor of the appellant, MMS returns the surety 
to the appellant. If the appeal is decided in MMS's favor, we will take 
action to collect full royalty payment or draw down on the surety. The 
MMS draws down on a surety if the appellant fails to comply with 
requirements relating to amount due, time frame, or surety submission 
or resubmission. Whenever MMS must draw down on a surety, the total 
amount due is defined as unpaid principal plus interest accrued to the 
projected receipt date of the surety payment. The five surety types are 
discussed below.

Form MMS-4435, Administrative Appeal Bond

    Appellants may file Form MMS-4435, Administrative Appeal Bond, 
which MMS uses to secure the financial interests of the public and 
Indian lessors during the entire administrative and judicial appeal 
process. The bond must be issued by a qualified surety company that is 
approved by the Department of the Treasury (see Department of the 
Treasury Circular No. 570, revised periodically in the Federal 
Register). The Associate Director for MRM (Associate Director) or the 
delegated bond-approving officer (officer) maintains these bonds in a 
secure facility. Once the appeal has concluded, MMS may release and 
return the bond to the appellant or collect royalty payment upon the 
bond. If collection is necessary for a remaining royalty payment 
balance, MMS will issue a demand for payment to the surety company with 
a notice to the appellant, including all interest accrued on the 
affected bill.

Form MMS-4436, Letter of Credit

    Appellants may choose to file Form MMS-4436, Letter of Credit, with 
no modifications. The Associate Director or officer maintains the 
Letter of Credit (LOC) in a secure facility. A bank must notarize and 
issue the LOC for appellants in which the bank has a minimum Fitch 
rating (formerly Bankwatch) of ``C'' for an LOC of less than $1 
million, ``B/C'' for an LOC between $1 million and $10 million, or 
``B'' for an LOC over $10 million. The LOC must have a minimum coverage 
period of 1 year and be automatically renewable for up to 5 years. The 
appellant is responsible for verifying that the bank provides a current 
rating to MMS. If the issuing bank's rating falls below the minimum 
acceptable level, a satisfactory replacement surety must be submitted 
within 14 days or MMS will draw down the existing LOC. If the bank 
issuing the LOC chooses not to renew the existing LOC, it must provide 
MMS with a notice of its decision not to renew 30 days prior to 
expiration of the LOC. Once the appeal has been concluded, MMS may 
release and return the LOC to the appellant or collect royalty payment 
upon the LOC. If collection is necessary for a remaining royalty 
payment balance, MMS will issue a demand for payment, which includes 
all interest assessed on the affected bill, to the bank with a notice 
to the appellant.

Self-Bonding

    For Federal oil and gas leases only, RSFA Section 4(l), as 
promulgated in regulations at 30 CFR 243.201, provides that no surety 
instrument is required when a person representing the appellant 
periodically demonstrates, to the satisfaction of MMS, that the 
guarantor or appellant is financially solvent and otherwise able to pay 
the obligation. Appellants must submit a written request to ``self-
bond'' every time a new appeal is filed. To evaluate the financial 
solvency and exemption from requirements of appellants to maintain a 
surety related to an appeal, MMS requires appellants to submit an 
audited, consolidated balance sheet. In some cases, MMS also requires 
copies of the most recent tax returns--up to 3 years--filed by 
appellants.
    Appellants must submit audited financial statements annually to 
support their net worth. The MMS uses the audited, consolidated balance 
sheet or business information supplied to evaluate the financial 
solvency of a lessee, designee, or payor seeking a stay of payment 
obligation pending review. If appellants do not have an audited, 
consolidated balance sheet documenting their net worth, or they do not 
meet the $300 million net worth requirement, MMS selects a business 
information or credit reporting service to provide information 
concerning an appellant's financial solvency. We charge the appellant a 
$50 fee each time we need to review data from a business information or 
credit reporting service. We need the fee to recover our costs to 
determine an appellant's financial solvency. The Associate Director or 
officer uses this information to determine the financial solvency of a 
lessee, designee, or payor on the basis of their net worth.

Certificate of Deposit (CD)

    Appellants may choose to secure their debts by requesting to use a 
CD from their bank. Appellants must file the request with MMS prior to 
the invoice due date. The MMS will accept a book-entry CD that 
explicitly assigns the CD to the Associate Director. A bank must issue 
the CD in which the bank has a minimum Fitch rating or is confirmed by 
a bank with an acceptable rating. The acceptable ratings for a CD are 
the same as for an LOC. If collection of the CD is necessary for a 
royalty payment balance, MMS will return unused CD funds to the 
appellant after total settlement of the appealed issues including 
applicable interest charges.

U.S. Treasury Securities (TS)

    Appellants may choose to secure their debts by requesting to use a 
TS. Appellants must file the request with MMS prior to the invoice due 
date. The MMS only accepts a book-entry TS. The TS must be a U.S. 
Treasury note or bond with maturity equal to or greater than 1 year. 
The TS must equal 120 percent of the appealed amount plus 1 year of 
estimated interest (necessary to protect MMS against interest rate 
fluctuations).
    Frequency of Response: Annually and on occasion.
    Estimated Number and Description of Respondents: 300 Federal/Indian 
lessees.
    Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 300 
hours.
    There are approximately 300 respondents (Federal/Indian lessees). 
Responses are annually and on occasion. The MMS estimates that there 
will be 200 surety instruments (135 bonds, 63 LOCs, 1 CD, and 1 TS) and 
100 self-bonding submissions each year. The MMS estimates the total 
annual burden is 300 reporting and recordkeeping hours, based on 1 hour 
per response, regardless of the type of surety. Based on a cost factor 
of $50 per hour, we estimate the total annual cost to industry is 
$15,000 ($50 x 300 hours = $15,000). We have not included in our 
estimates certain requirements performed in the normal course of 
business and considered usual and customary.
    The following chart shows the breakdown of the estimated burden 
hours by CFR section and paragraph:

[[Page 61524]]



                                  Respondents' Estimated Annual Burden Hours 1
----------------------------------------------------------------------------------------------------------------
                                                                                                         Annual
      Citation 30 CFR 243         Reporting and recordkeeping      Hour burden      Average number of    burden
                                          requirement                               annual responses     hours
----------------------------------------------------------------------------------------------------------------
                                          Subpart A--General Provisions
----------------------------------------------------------------------------------------------------------------
243.4(a)(1)....................  How do I suspend compliance   1 hour............  200 surety                200
                                  with an order?.                                   instruments
                                                                                    (including Forms
                                                                                    MMS-4435 and MMS-
                                                                                    4436, CD or TS).
                                 (a) If you timely appeal an
                                  order, and if that order or
                                  portion of that order:.
                                 (1) Requires you to make a
                                  payment, and you want to
                                  suspend compliance with
                                  that order, you must post a
                                  bond or other surety
                                  instrument or demonstrate
                                  financial solvency * * *.
243.6..........................  When must I or another           Burden covered Sec.   243.4(a)(1)            0
                                  person meet the bonding or
                                  financial solvency
                                  requirements under this
                                  part?.
                                 If you must meet the bonding
                                  or financial solvency
                                  requirements under Sec.
                                  243.4(a)(1), or if another
                                  person is meeting your
                                  bonding or financial
                                  solvency requirements, then
                                  either you or the other
                                  person must post a bond or
                                  other surety instrument or
                                  demonstrate financial
                                  solvency within 60 days
                                  after you receive the order
                                  or the Notice of Order..
243.7(a).......................  What must a person do when           Burden covered under Sec.                0
                                  posting a bond or other                    243.4(a)(1).
                                  surety instrument or
                                  demonstrating financial
                                  solvency on behalf of an
                                  appellant?.
                                 If you assume an appellant's
                                  responsibility to post a
                                  bond or other surety
                                  instrument or demonstrate
                                  financial solvency * * *.
                                 (a) Must notify MMS in
                                  writing * * * that you are
                                  assuming the appellant's
                                  responsibility * * *.
243.8(a)(2) and (b)(2).........  When will MMS suspend my         Burden covered Sec.   243.4(a)(1)            0
                                  obligation to comply with
                                  an order?.
                                 (a) Federal leases. * * *...
                                 (2) If the amount under
                                  appeal is $10,000 or more,
                                  MMS will suspend your
                                  obligation to comply with
                                  that order if you:.
                                 (i) Submit an MMS-specified
                                  surety instrument under
                                  subpart B of this part
                                  within a time period MMS
                                  prescribes; or.
                                 (ii) Demonstrate financial
                                  solvency under subpart C.
                                 (b) Indian leases. * * *....
                                 (2) If the amount under
                                  appeal is $1,000 or more,
                                  MMS will suspend your
                                  obligation to comply with
                                  that order if you submit an
                                  MMS-specified surety
                                  instrument under subpart B
                                  of this part within a time
                                  period MMS prescribes.
--------------------------------
                                         Subpart B--Bonding Requirements
----------------------------------------------------------------------------------------------------------------
243.101(b).....................  How will MMS determine the           Burden covered under Sec.                0
                                  amount of my bond or other                 243.4(a)(1)
                                  surety instrument?.
                                 * * * (b) If your appeal is
                                  not decided within 1 year
                                  from the filing date, you
                                  must increase the surety
                                  amount to cover additional
                                  estimated interest for
                                  another 1-year period. You
                                  must continue to do this
                                  annually * * *.
--------------------------------
                                   Subpart C--Financial Solvency Requirements
----------------------------------------------------------------------------------------------------------------
243.200(a) and (b).............  How do I demonstrate          1 hour............  100 self-bonding          100
                                  financial solvency?.                              submissions
                                                                                    (demonstration of
                                                                                    financial
                                                                                    solvency).
                                 (a) To demonstrate financial
                                  bonding solvency under this
                                  part, you submissions must
                                  submit an audited
                                  (demonstration consolidated
                                  balance sheet, of and, if
                                  requested by the MMS
                                  financial bond-approving
                                  officer, up to 3 solvency)
                                  years of tax returns to the
                                  MMS, * * *.

[[Page 61525]]

 
                                 (b) You must submit an
                                  audited consolidated
                                  balance sheet annually,
                                  and, if requested,
                                  additional annual tax
                                  returns on the date MMS
                                  first determined that you
                                  demonstrated financial
                                  solvency as long as you
                                  have active appeals, or
                                  whenever MMS requests. * *
                                  *.
243.201 (c)(1), (c)(2)(i) and    How will MMS determine if I       Burden covered under Sec.  Sec.             0
 (c)(2)(ii) and 243.201 (d)(2).   am financially solvent?.        243.4(a)(1) and 243.200(a) and (b)
                                 * * * (c) If your net worth,
                                  minus the amount we would
                                  require as surety under
                                  subpart B for all orders
                                  you have appealed is less
                                  than $300 million, you must
                                  submit * * *:.
                                 (1) A written request asking
                                  us to consult a business-
                                  information, or credit-
                                  reporting service or
                                  program to determine your
                                  financial solvency; and.
                                 (2) A nonrefundable $50
                                  processing fee:.
                                 (i) You must pay the
                                  processing fee * * *;.
                                 (ii) You must submit the fee
                                  with your request * * * and
                                  then annually on the date
                                  we first determined that
                                  you demonstrated financial
                                  solvency, as long as you
                                  are not able to demonstrate
                                  financial solvency * * *
                                  and you have active appeals.
                                 (d) * * * (2) For us to
                                  consider you financially
                                  solvent, the business-
                                  information or credit-
                                  reporting service or
                                  program must demonstrate
                                  your degree of risk as low
                                  to moderate: * * *.
243.202(c).....................  When will MMS monitor my             Burden covered under Sec.                0
                                  financial solvency?.                       243.4(a)(1)
                                 * * * (c) If our bond-
                                  approving officer
                                  determines that you are no
                                  longer financially solvent,
                                  you must post a bond or
                                  other MMS-specified surety
                                  instrument under subpart B.
                                                              ---------------------
    Total Burden...............  ............................  ..................  300...............        300
----------------------------------------------------------------------------------------------------------------

    Estimated Annual Reporting and Recordkeeping ``Non-hour Cost'' 
Burden: We have identified a $50 fee for reviewing data from a business 
information or credit reporting service as a ``non-hour cost'' burden. 
Over the past 3 years, MMS has only collected a $50 fee from 5 lessees.
    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: 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 identified a $50 
fee for reviewing data from a business information or credit reporting 
service as a ``non-hour cost'' burden 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

[[Page 61526]]

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 7, 2004.
Janice Bigelow,
Acting Associate Director for Minerals Revenue Management.
[FR Doc. 04-23304 Filed 10-18-04; 8:45 am]
BILLING CODE 4310-MR-P