[Federal Register Volume 70, Number 118 (Tuesday, June 21, 2005)]
[Notices]
[Pages 35695-35698]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-12134]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service


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

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Notice of 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 notifying the public that we have submitted to the Office of 
Management and Budget (OMB) an information collection request (ICR) to 
renew approval of the paperwork requirements in the regulations under

[[Page 35696]]

30 CFR part 218, subpart A--General Provisions; subpart B--Oil and Gas, 
General; and subpart E--Solid Minerals--General. This notice also 
provides the public a second opportunity to comment on the paperwork 
burden of these regulatory requirements. We changed the title of this 
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. Sec.  218.52 How does a lessee designate a Designee? (Form MMS-
4425, Designation Form for Royalty Payment Responsibility) and 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.''

DATES: Submit written comments on or before July 21, 2005.

ADDRESSES: Submit written comments by either FAX (202) 395-6566 or e-
mail ([email protected]) directly to the Office of Information 
and Regulatory Affairs, OMB, Attention: Desk Officer for the Department 
of the Interior (OMB Control Number 1010-0107). Mail your 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, the 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, e-mail [email protected]. You may 
also contact Sharron Gebhardt to obtain a copy, at no cost, of the form 
and regulations that require this collection of information.

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. Sec.  218.52 
How does a lessee designate a Designee? (Form MMS-4425, Designation 
Form for Royalty Payment Responsibility) and 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 matters relevant to mineral resource development on 
Federal and Indian lands and the Outer Continental Shelf (OCS). The 
Secretary, under the Mineral Leasing Act (30 U.S.C. 1923) and the Outer 
Continental Shelf Lands Act (43 U.S.C. 1353), is responsible for 
managing the production of minerals from Federal and Indian lands and 
the OCS, collecting royalties from lessees who produce minerals, and 
distributing the funds collected in accordance with applicable laws.
    The Secretary has a 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 trust responsibility.
    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 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 
[RSFA]), 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 February 13, 1997 (6 months after the 
August 13, 1996, 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 seven 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 2l8.53(b) and 218.203(b), 
allowing only lessees with written permission from

[[Page 35697]]

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 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 (burden hours covered under ICR 1010-0140, expires October 
31, 2006), for oil and gas lease recoupments and Form MMS-4430, Solid 
Mineral Production and Royalty Report (burden hours covered under ICR 
1010-0120, expires October 31, 2007), for solid mineral lease 
recoupments. The MMS requires tribal permission to ensure tribes and 
individual Indian mineral owners receive correct revenues from 
production on their leases.
    The MMS is requesting OMB's approval to continue to collect this 
information. Not collecting this information would limit the 
Secretary's ability to discharge his/her duties and may also result in 
loss of royalty payments. Proprietary information submitted is 
protected, and there are no questions of a sensitive nature included in 
this information collection.
    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.
    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:

                                   Respondents' Estimated Annual Burden Hours
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                                                                                             Average
                                                                                   Hour     number of    Annual
         Citation 30 CFR 218           Reporting and recordkeeping requirement    burden      annual     burden
                                                                                            responses    Hours
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           Subpart A--General Provisions--Cross-lease netting in calculation of late-payment interest.
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218.42(b) and (c)....................  Cross-lease netting in calculation of          2             7         14
                                        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 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?
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218.52 (a), (c), and (d).............  How does a lessee designate a Designee?        0.75      1,600      1,200
                                        (a) If 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..
                                       The MMS currently uses Form MMS-4425,
                                        Designation Form for Royalty Payment
                                        Responsibility to collect this
                                        information.
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              Subpart B--Oil and Gas, General--Recoupment of overpayments on Indian mineral leases.
----------------------------------------------------------------------------------------------------------------
218.53...............................  (b)Recoupment of overpayments on Indian        1             5          5
                                        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 Indian           1             1          1
                                        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 include 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, 
which were not included in the previous renewal. Burden hours for 30 
CFR 218.57, which were included in the previous renewal, are now

[[Page 35698]]

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.
    Public Disclosure Statement: The PRA (44 U.S.C. 3501 et seq.) 
provides that an agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless it displays 
a currently valid OMB control number.
    Comments: Section 3506(c)(2)(A) of the PRA requires each agency ``* 
* * to provide notice * * * and otherwise consult with members of the 
public and affected agencies concerning each proposed collection of 
information * * *.'' Agencies must specifically solicit comments to: 
(a) Evaluate whether the proposed collection of information is 
necessary for the agency to perform its duties, including whether the 
information is useful; (b) evaluate the accuracy of the agency's 
estimate of the burden of the proposed collection of information; (c) 
enhance the quality, usefulness, and clarity of the information to be 
collected; and (d) minimize the burden on the respondents, including 
the use of automated collection techniques or other forms of 
information technology.
    To comply with the public consultation process, we published a 
notice in the Federal Register on October 19, 2004 (69 FR 61519), 
announcing that we would submit this ICR to OMB for approval. The 
notice provided the required 60-day comment period. We received no 
comments relevant to the Federal Register notice. If you wish to 
comment in response to this notice, you may send your comments to the 
offices listed under the ADDRESSES section of this notice. The OMB has 
up to 60 days to approve or disapprove the information collection but 
may respond after 30 days. Therefore, to ensure maximum consideration, 
OMB should receive public comments by July 21, 2005.
    Public Comment Policy: We will post all comments in response to 
this notice on our Web site at http://www.mrm.mms.gov/Laws_R_D/InfoColl/InfoColCom.htm. We will also make copies of the comments 
available for public review, including names and addresses of 
respondents, during regular business hours at our offices in Lakewood, 
Colorado. 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 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: April 14, 2005.
Lucy Querques Denett,
Associate Director for Minerals Revenue Management.
[FR Doc. 05-12134 Filed 6-20-05; 8:45 am]
BILLING CODE 4310-MR-P