[Federal Register Volume 69, Number 220 (Tuesday, November 16, 2004)]
[Notices]
[Pages 67162-67164]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-25330]


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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 1010-0073).

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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 220. The previous title of this ICR was ``30 CFR Part 220, 
Accounting Procedures for Determining Net Profit Share Payment for 
Outer Continental Shelf Oil and Gas Leases.'' The new title of this ICR 
is ``30 CFR Part 220, Accounting Procedures for Determining Net Profit 
Share Payment for Outer Continental Shelf Oil and Gas Leases, Sec.  
220.010 NPSL capital account, Sec.  220.030 Maintenance of records, 
Sec.  220.031 Reporting and payment requirements, Sec.  220.032 
Inventories, and Sec.  220.033 Audits.''

DATES: Submit written comments on or before January 18, 2005.

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 220, Accounting Procedures for Determining Net 
Profit Share Payment for Outer Continental Shelf Oil and Gas Leases, 
Sec.  220.010 NPSL Capital Account, Sec.  220.030 Maintenance of 
Records, Sec.  220.031 Reporting and Payment Requirements, Sec.  
220.032 Inventories, and Sec.  220.033 Audits.
    OMB Control Number: 1010-0073.
    Bureau Form Number: None.
    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 are Public Law 97-451--Jan. 12, 
1983 (Federal Oil and Gas Royalty Management Act of 1982) and Public 
Law 212--Aug. 7, 1953 (Outer Continental Shelf Lands Act of 1953, as 
amended by Public Law 93-627--Jan. 3, 1975; Public Law 95-372--Sept. 
18, 1978; and Public Law 98-498--Oct. 19, 1984). These citations can be 
viewed on our Web site at http://www.mrm.mms.gov/Laws_R_D/PublicLawsAMR.htm.

General Information

    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 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 royalties or net profit share payments are properly 
valued and appropriately paid. Proprietary information submitted to MMS 
under this collection is protected, and no items of a sensitive nature 
are collected.

Net Profit Share Lease Bidding System

    To encourage exploration and development of oil and gas leases on 
submerged Federal lands on the Outer Continental Shelf, regulations 
were promulgated at 30 CFR 260, Outer Continental Shelf Oil and Gas 
Leasing. Specific implementation regulations for the net profit share 
lease (NPSL) bidding system are promulgated at 30 CFR 260.110(d) 
(covered under ICR 1010-0143, expires December 31, 2006). The MMS 
established the NPSL bidding system to properly balance a fair market 
return to the Federal Government for the lease of its lands, with a 
fair profit to companies risking their investment capital. The system 
provides an incentive for early and expeditious exploration and 
development and provides for sharing the risks by the lessee and the 
Federal Government. The NPSL bidding system incorporates a fixed 
capital recovery system as a means through which the lessee recovers 
costs of exploration and development from production revenues, along 
with a reasonable return on investment.
    The Federal Government does not receive a profit share payment from 
an NPSL until the lessee shows a credit balance in its capital account; 
that is, cumulative revenues and other credits exceed cumulative costs. 
The credit balance is multiplied by the net profit share rate (30 to 50 
percent), resulting in the amount of net profit share payment due the 
Federal Government.
    The MMS requires lessees to maintain an NPSL capital account for 
each lease, which transfers to a new owner when sold. Following the 
cessation of production, lessees are also required to provide either an 
annual or a monthly report to the Federal Government, using data from 
the capital account. In addition, NPSL lessees must notify MMS of their 
intent to perform an inventory and file a report after each inventory 
of controllable material. Further, when non-operators of an NPSL call 
for an audit, they must notify MMS. When MMS calls for an audit, the 
lessee must notify all non-operators on the lease. These requirements 
are located at 30 CFR Part 220, Sec. Sec.  220.010, 220.030, 220.031, 
220.032, and 220.033. This collection of information is necessary in 
order to determine when net profit share payments are due and to 
determine the proper amount of payment.
    We are revising this ICR to add citations related to records 
management (30 CFR 220.030(a)) and inventories (30 CFR 220.032(b)). We 
added a new citation for a PRA-exempt requirement

[[Page 67163]]

related to audits (30 CFR 220.033(e)). For clarification, we added 
Sec.  220.031(c) related to payment requirements. We have not included 
in our estimates certain requirements performed in the normal course of 
business, which are considered usual and customary.
    Frequency of Response: Annually, monthly, and on occasion.
    Estimated Number and Description of Respondents: 9 lessees.
    Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 1,583 
hours.
    All 9 lessees report monthly because all current NPSLs are in 
producing status. Because the establishment of capital accounts [30 CFR 
220.010(a)] and capital account annual reporting [30 CFR 220.031(a)] 
requirements are necessary only during non-producing status of a lease, 
we included only 1 response annually for these requirements, in case a 
new NPSL is established. The following chart shows the estimated burden 
hours by CFR section and paragraph:

                                   Respondents' Estimated Annual Burden Hours
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                                                                                         Number of      Annual
        Citation  30 CFR 220               Reporting & recordkeeping           Hour        annual       burden
                                                  requirement                 burden     responses      hours
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Part 220--Accounting procedures for determining net profit share payment for outer continental shelf oil and gas
                                                     leases
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                                       Sec.   220.010 NPSL capital account
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220.010(a)..........................  (a) For each NPSL tract, an NPSL               1            1            1
                                       capital account shall be
                                       established and maintained by the
                                       lessee for NPSL operations. * * *
-------------------------------------
                                      Sec.   220.030 Maintenance of records
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220.030(a)..........................  (a) Each lessee * * * shall                    1            9            9
                                       establish and maintain such
                                       records as are necessary * * *
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                                Sec.   220.031 Reporting and payment requirements
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220.031(a)..........................  (a) Each lessee subject to this               16            1           16
                                       part shall file an annual report
                                       during the period from issuance of
                                       the NPSL until the first month in
                                       which production revenues are
                                       credited to the NPSL capital
                                       account. * * *
220.031(b)..........................  (b) Beginning with the first month            13          108        1,404
                                       in which production revenues are
                                       credited to the NPSL capital
                                       account, each lessee * * * shall
                                       file a report for each NPSL, not
                                       later than 60 days following the
                                       end of each month * * *
220.031(c)..........................  (c) Each lessee subject to this        Burden hours covered              0
                                       part 220 shall submit, together         under 220.031(b)
                                       with the report required * * * any
                                       net profit share payment due * * *
220.031(d)..........................  (d) Each lessee * * * shall file a             8            9           72
                                       report not later than 90 days
                                       after each inventory is taken * *
                                       *
220.031(e)..........................  (e) Each lessee * * * shall file a             4            9           36
                                       final report, not later than60
                                       days following the cessation of
                                       production * * *
-------------------------------------
                                           Sec.   220.032 Inventories
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220.032(b)..........................  (b) At reasonable intervals, but at            1            9            9
                                       least once every three years,
                                       inventories of controllable
                                       materiel shall be taken by the
                                       lessee. Written notice of
                                       intention to take inventory shall
                                       be given by the lessee at least 30
                                       days before any inventory is to be
                                       taken so that the Director may be
                                       represented at the taking of
                                       inventory. * * *
-------------------------------------
                                              Sec.   220.033 Audits
----------------------------------------------------------------------------------------------------------------
220.033(b)(1).......................  (b)(1) When nonoperators of an NPSL            2            9           18
                                       lease call an audit in accordance
                                       with the terms of their operating
                                       agreement, the Director shall be
                                       notified of the audit call * * *
220.033(b)(2).......................  (b)(2) If DOI determines to call               2            9           18
                                       for an audit, DOI shall notify the
                                       lessee of its audit call and set a
                                       time and place for the audit. * *
                                       * The lessee shall send copies of
                                       the notice to the notice to the
                                       nonoperators on the lease. * * *
220.033(e)..........................  (e) Records required to be kept      The Office of Regulatory            0
                                       under Sec.   220.030(a) shall be     Affairs has determined
                                       made available for inspection by     that the audit process
                                       any authorized agent of DOI * * *     is not covered by the
                                                                             PRA because MMS staff
                                                                               asks non-standard
                                                                             questions to resolve
                                                                                  exception.
                                     --------------------------------------
    Total burden....................  ...................................  ...........          164        1,583
----------------------------------------------------------------------------------------------------------------

    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.

[[Page 67164]]

    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 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 (see below).
    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: November 5, 2004.
Lucy Querques Denett,
Associate Director for Minerals Revenue Management.
[FR Doc. 04-25330 Filed 11-15-04; 8:45 am]
BILLING CODE 4310-MR-P