[Federal Register Volume 70, Number 106 (Friday, June 3, 2005)]
[Notices]
[Pages 32647-32651]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-11098]


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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 an extension of a currently approved information 
collection (OMB Control Number 1010-0155).

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SUMMARY: To comply with the Paperwork Reduction Act (PRA) of 1995, 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. The information collection request (ICR) is titled ``30 CFR 
Part 204 Alternatives for Marginal Properties, Subpart C--Accounting 
and Auditing Relief.'' This ICR covers the regulatory language under 30 
CFR part 204, as published in the final rulemaking on September 13, 
2004 (69 FR 55076). This citation explains how lessees and their 
designees can obtain accounting and auditing relief for production from 
Federal oil and gas leases and units and communitization agreements 
that qualify as marginal properties.

DATES: Submit written comments on or before August 2, 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 or wish to hand-carry your comments, 
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 204--ALTERNATIVES FOR 
MARGINAL PROPERTIES, Subpart C--Accounting and Auditing Relief.
    OMB Control Number: 1010-0155.
    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.
    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 accurately valued and 
appropriately paid. A response is required to obtain the benefit of 
auditing and accounting relief.
    Proprietary information submitted to MMS under this collection is 
protected, and no items of a sensitive nature are collected.

Applicable Citations

    On August 13, 1996, Congress enacted Public Law 104-185--Aug. 13, 
1996 (Federal Oil and Gas Royalty

[[Page 32648]]

Simplification and Fairness Act of 1996 [RSFA]), as corrected by Public 
Law 104-200--Sept. 22, 1996. RSFA amends portions of Public Law 97-
451--Jan. 12, 1983 (Federal Oil and Gas Royalty Management Act of 1982 
[FOGRMA]). The MMS amended its regulations in 2004 to provide guidance 
to lessees and designees seeking accounting and auditing relief for 
Federal marginal properties.
    RSFA section 7 provides for MMS and states concerned to determine, 
on a case-by-case basis, the amount of marginal production that may be 
subject to either prepayment of royalty, or accounting and auditing 
relief. RSFA does not define marginal property for purposes of section 
7, but does say that any granted alternative is to promote production, 
reduce administrative costs, and increase net receipts to the United 
States and the states. RSFA also provides that the state concerned with 
a marginal property must approve any use of an alternative under 
section 7.
    There are two types of relief: Cumulative royalty reports and 
payments relief, and other relief. Under Sec.  204.202, MMS requires 
notification from lessees or designees who request to take the 
cumulative royalty reporting and payment relief option. Under Sec.  
204.203, MMS requires a relief request from lessees or designees who 
want to obtain any other type of accounting and auditing relief. This 
information collection is voluntary; only those lessees or designees 
who choose to obtain relief must supply this information.
    A state may decide in advance that it will or will not allow one or 
both of the relief options for each particular year. To help states 
decide whether to allow one or both of the relief options, MMS will 
send states a Report of Marginal Properties by October 1 preceding the 
calendar year. Each state must notify MMS of its intent to allow or not 
allow one or both of the relief options.
    The MMS has determined, depending on the type of accounting and 
auditing relief being sought by the lessee or designee, that a lessee 
or designee must file either a notification or a request for relief 
with MMS to obtain the applicable form of relief provided for under 
RSFA section 7. This will allow the lessee or designee to specify the 
type of relief requested under RSFA section 7 on a case-by-case basis.
    For the other relief option, MMS and the state concerned will use 
the information supplied by the lessee or designee in their relief 
request to: (1) Identify the person making the request; (2) identify 
the marginal property for which relief is being requested; (3) 
determine the relief being sought by the lessee or designee; (4) 
determine if the relief should be granted or denied; and (5) monitor 
the lessee's continuing eligibility of the relief being taken. After 
consulting with the state concerned, MMS will either approve, deny, or 
modify requests in writing. Under RSFA section 7, both MMS and a state 
concerned with a marginal property must approve any accounting and 
auditing relief granted for a marginal property. Therefore, MMS and the 
state concerned must determine that the relief is in the best interests 
of the Federal Government and the state concerned.
    Frequency of Response: One time, and then again only if changes 
occur for Federal lessees/designees, and annually for states.
    Estimated Number and Description of Respondents: 1,010 Federal 
lessees/designees and 15 states.
    Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 406 
hours.
    With participation in the relief program offered in 30 CFR part 
204, MMS estimates an annual reporting burden hour savings of 694 hours 
for each subsequent year. This annual reporting burden hour savings are 
reflected in ICR 1010-0140 (expires 10/31/2006). We estimate 
approximately 134 requests from 1,010 Federal lessees/designees. 
Additionally, we estimate four responses from states, each requiring an 
annual in-depth analysis informing MMS of their decision to participate 
or not participate in accounting and auditing relief. 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 estimated burden hours by CFR section and paragraph:

                                          Section A.12 Burden Breakdown
----------------------------------------------------------------------------------------------------------------
                                                                                  Average number
        Citation 30 CFR 204          Reporting and recordkeeping    Hour burden      of annual     Annual burden
                                             requirement                             responses         hours
----------------------------------------------------------------------------------------------------------------
                                 PART 204--ALTERNATIVES FOR MARGINAL PROPERTIES
                                    Subpart C--Accounting and Auditing Relief
----------------------------------------------------------------------------------------------------------------
204.202(b)(1)......................  Sec.   204.202 What is the                2             100             200
                                      cumulative royalty reports
                                      and payments relief
                                      option? (b) To use the
                                      cumulative royalty reports
                                      and payments relief
                                      option, you must do all of
                                      the following:
                                     (1) Notify MMS in writing
                                      by January 31 of the
                                      calendar year for which
                                      you begin taking your
                                      relief. * * *
------------------------------------
204.202(b)(2)......................  Sec.   204.202 What is the    Burden covered under OMB Control Number 1010-
                                      cumulative royalty reports            0140 (expires 10/31/2006).
                                      and payments relief
                                      option?
                                     (2) Submit your royalty
                                      report and payment * * *
                                      by the end of February of
                                      the year following the
                                      calendar year for which
                                      you reported annually * *
                                      *. If you have an
                                      estimated payment on file,
                                      you must submit your
                                      royalty report and payment
                                      by the end of March of the
                                      year following the
                                      calendar year for which
                                      you reported annually;
                                     (3) Use the sales month
                                      prior to the month that
                                      you submit your annual
                                      report and payment * * *,
                                      for the entire previous
                                      calendar year's production
                                      for which you are paying
                                      annually. * * *
------------------------------------

[[Page 32649]]

 
204.202(b)(4), (b)(5), (c), (d)(1),  Sec.   204.202 What is the    Burden covered under OMB Control Number 1010-
 (d)(2), (e)(1), and (e)(2).          cumulative royalty reports            0140 (expires 10/31/2006).
                                      and payments relief
                                      option? * * * (b) To use
                                      the cumulative royalty
                                      reports and payments
                                      relief option, you must *
                                      * *.
                                     (4) Report one line of
                                      cumulative royalty
                                      information on Form MMS-
                                      2014 for the calendar year
                                      * * *; and
                                     (5) Report allowances on
                                      Form MMS-2014 on the same
                                      annual basis as the
                                      royalties for your
                                      marginal property
                                      production.
                                     (c) If you do not pay your
                                      royalty by the date due in
                                      paragraph (b) of this
                                      section, you will owe late
                                      payment interest * * *
                                      from the date your payment
                                      was due under this section
                                      until the date MMS
                                      receives it. * * *
                                     (e) If you dispose of your
                                      ownership interest in a
                                      marginal property for
                                      which you have taken
                                      relief * * * you must:
                                     (1) Report and pay
                                      royalties for the portion
                                      of the calendar year for
                                      which you had an ownership
                                      interest; and
                                     (2) Make the report and
                                      payment by the end of the
                                      month after you dispose of
                                      the ownership interest in
                                      the marginal property. If
                                      you do not report and pay
                                      timely, you will owe
                                      interest * * * from the
                                      date the payment was due *
                                      * *.
------------------------------------
204.203(b).........................  Sec.   204.203 What is the                4              10              40
                                      other relief option? * * *
                                      (b) You must request
                                      approval from MMS * * *
                                      before taking relief under
                                      this option.
------------------------------------
204.205(a) and (b).................  Sec.   204.205 How do I       Hour burden covered under Sec.   204.203(b).
                                      obtain accounting and
                                      auditing relief?
                                     (a) To take cumulative
                                      reports and payments
                                      relief under Sec.
                                      204.202, you must notify
                                      MMS in writing by January
                                      31 of the calendar year
                                      for which you begin taking
                                      your relief. * * *
                                     (b) To obtain other relief
                                      under Sec.   204.203, you
                                      must file a written
                                      request for relief with
                                      MMS. * * *
------------------------------------
204.206(a)(3)(i) and (b)(1)........  Sec.   204.206 What will      Hour burden covered under Sec.   204.203(b).
                                      MMS do when it receives my
                                      request for other relief?
                                      When MMS receives your
                                      request for other relief
                                      under Sec.   204.205(b),
                                      it will notify you in
                                      writing as follows:
                                     (a) If your request for
                                      relief is complete, MMS
                                      may either approve, deny,
                                      or modify your request in
                                      writing after consultation
                                      with any State * * *.
                                     (3) If MMS modifies your
                                      relief request, MMS will
                                      notify you of the
                                      modifications.
                                     (i) You have 60 days from
                                      your receipt of MMS's
                                      notice to either accept or
                                      reject any modification(s)
                                      in writing. * * *
                                     (b) If your request for
                                      relief is not complete,
                                      MMS will notify you in
                                      writing * * *.
                                     (1) You must submit the
                                      missing information within
                                      60 days of your receipt of
                                      MMS's notice * * *.
------------------------------------
204.208(c)(1) and (d)(1)...........  Sec.   204.208 May a State               40               4             160
                                      decide that it will or
                                      will not allow one or both
                                      of the relief options
                                      under this subpart?
                                     (c) If a State decides * *
                                      * that it will or will not
                                      allow one or both of the
                                      relief options * * *
                                      within 30 days * * * the
                                      State must:
                                     (1) Notify the Associate
                                      Director for Minerals
                                      Revenue Management, MMS,
                                      in writing, of its intent
                                      to allow or not allow one
                                      or both of the relief
                                      options * * *.
                                     (d) If a State decides in
                                      advance * * * that it will
                                      not allow one or both of
                                      the relief options * * *
                                      the State must:

[[Page 32650]]

 
                                     (1) Notify the Associate
                                      Director for Minerals
                                      Revenue Management, MMS,
                                      in writing, of its intent
                                      to allow one or both of
                                      the relief options * * *.
------------------------------------
204.209(b).........................  Sec.   204.209 What if a                .25              24               6
                                      property ceases to qualify
                                      for relief obtained under
                                      this subpart?
                                     (b) If a property is no
                                      longer eligible for relief
                                      * * * the relief for the
                                      property terminates as of
                                      December 31 of that
                                      calendar year. You must
                                      notify MMS in writing by
                                      December 31 that the
                                      relief for the property
                                      has terminated. * * *
------------------------------------
204.210(c) and (d).................  Sec.   204.210 What if a      Burden covered under OMB Control Number 1010-
                                      property is approved as               0140 (expires 10/31/2006).
                                      part of a nonqualifying
                                      agreement?
                                     (c) * * * the volumes on
                                      which you report and pay
                                      royalty * * * must be
                                      amended to reflect all
                                      volumes produced on or
                                      allocated to your lease
                                      under the nonqualifying
                                      agreement as modified by
                                      BLM * * *. Report and pay
                                      royalties for your
                                      production using the
                                      procedures in Sec.
                                      204.202(b).
                                     (d) If you owe additional
                                      royalties based on the
                                      retroactive agreement
                                      approval and do not pay
                                      your royalty by the date
                                      due in Sec.   204.202(b),
                                      you will owe late payment
                                      interest determined under
                                      30 CFR 218.54 from the
                                      date your payment was due
                                      under Sec.   204.202(b)(2)
                                      until the date MMS
                                      receives it.
------------------------------------
204.214(b)(1) and (b)(2)...........  Sec.   204.214(b) Is          Burden covered under OMB Control Number 1010-
                                      minimum royalty due on a              0140 (expires 10/31/2006).
                                      property for which I took
                                      relief?
                                     (b) If you pay minimum
                                      royalty on production from
                                      a marginal property during
                                      a calendar year for which
                                      you are taking cumulative
                                      royalty reports and
                                      payment relief, and:
                                     (1) The annual payment you
                                      owe under this subpart is
                                      greater than the minimum
                                      royalty you paid, you must
                                      pay the difference between
                                      the minimum royalty you
                                      paid and your annual
                                      payment due under this
                                      subpart; or
                                     (2) The annual payment you
                                      owe under this subpart is
                                      less than the minimum
                                      royalty you paid, you are
                                      not entitled to a credit
                                      because you must pay at
                                      least the minimum royalty
                                      amount on your lease each
                                      year.
------------------------------------
      Total........................  ...........................  ..............             138             406
----------------------------------------------------------------------------------------------------------------

    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: 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

[[Page 32651]]

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: May 24, 2005.
Lucy Querques Denett,
Associate Director for Minerals Revenue Management.
[FR Doc. 05-11098 Filed 6-2-05; 8:45 am]
BILLING CODE 4310-MR-P