[Federal Register Volume 70, Number 118 (Tuesday, June 21, 2005)]
[Notices]
[Pages 35698-35702]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-12135]


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

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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 OMB an information 
collection request (ICR) to renew approval of the paperwork 
requirements in the regulations under 30 CFR 243. 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 
243. The previous title of this ICR was ``30 CFR Part 243--Suspensions 
Pending Appeal and Bonding.'' The new title of this ICR is ``30 CFR 
243--Suspensions Pending Appeal and Bonding--Minerals Revenue 
Management (Forms MMS-4435, Administrative Appeal Bond; MMS-4436, 
Letter of Credit; and MMS-4437, Assignment of Certificate of 
Deposit).''

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 1010-0122). 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, our 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 forms 
and regulations that require the subject collection of information.

SUPPLEMENTARY INFORMATION:
    Title: 30 CFR 243--Suspensions Pending Appeal and Bonding--Minerals 
Revenue Management (Forms MMS-4435, Administrative Appeal Bond; MMS-
4436, Letter of Credit; and MMS-4437, Assignment of Certificate of 
Deposit).
    OMB Control Number: 1010-0122.
    Bureau Form Number: Forms MMS-4435, MMS-4436, and MMS-4437.
    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 of 1920 (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 for the Secretary and assists 
the Secretary in carrying out the Department's trust responsibility.
    Additional applicable citations of the laws pertaining to mineral 
leases include Public Law 97-451--Jan. 12,

[[Page 35699]]

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 Public Law 97-382--Dec. 22, 1982 
(Indian Mineral Development Act of 1982). Public laws pertaining to 
mineral royalties are located on our Web site at http://www.mrm.mms.gov/Laws_R_D/PublicLawsAMR.htm. The RSFA Section 4(l), 
``Stay of Payment Obligation Pending Review,'' requires MMS to evaluate 
any person, ordered by the Secretary or a delegated state to pay any 
obligation (other than an assessment) subject to RSFA, to determine 
whether that person is entitled to a stay of the order without bond or 
other surety instrument, pending an administrative or judicial 
proceeding, based on the financial solvency of that person.
    Implementing regulations at 30 CFR 243 govern the suspension of 
orders or decisions pending administrative appeal for Federal leases. 
These regulations require the submission of information demonstrating 
financial solvency by the person who represents the appellant, 
requesting a suspension without the need to provide a surety. For those 
appellants who are not financially solvent or for appeals involving 
Indian leases, MMS requires that a surety instrument be posted to 
secure the financial interest of the public and Indian lessors during 
the entire administrative or judicial appeal process. This information 
collection request covers the burden hours associated with appellants 
submitting financial statements or surety instruments, subject to 
annual audit, required to stay an MMS order.
    Minerals produced from Federal and Indian leases vary greatly in 
the nature of occurrence, production and processing methods, and 
markets served. 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 such minerals. The information 
collected includes data necessary to ensure that the royalties are paid 
appropriately.
    Proprietary information submitted to MMS under this collection is 
protected, and no items of a sensitive nature are collected. A response 
is required to obtain the benefit of suspending compliance with an 
order pending appeal.

Stay of Payment Pending Appeal

    Title 30 CFR 243.1 states that lessees or recipients of MMS 
Minerals Revenue Management (MRM) orders may suspend compliance with an 
order if they appeal in accordance with 30 CFR 290, Subpart B--Appeals 
of Royalty Management Program and Delegated States Orders (the Royalty 
Management Program is now known as Minerals Revenue Management). 
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, or demonstrate financial solvency. The MMS 
accepts the following surety types: Form MMS-4435, Administrative 
Appeal Bond; Form MMS-4436, Letter of Credit; Form MMS-4437, Assignment 
of Certificate of Deposit; Self-bonding; 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 favor of MMS, then MMS 
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. Appellants 
may refer to the Surety Instrument Posting Instructions for each of the 
five surety types to submit the respective information. 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. Under 30 CFR 243.4, appellants are required to submit their 
contact and surety amount information on the bond to obtain the benefit 
of suspension of an obligation to comply with an order. 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. Under 30 CFR 243.4, appellants are required to submit 
their contact and surety amount information on a surety instrument to 
obtain the benefit of suspension of an obligation to comply with an 
order. 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.

Form MMS-4437, Assignment of Certificate of Deposit

    Appellants may choose to secure their debts by requesting to use a 
Certificate of Deposit (CD) from their bank and

[[Page 35700]]

submitting Form MMS-4437, Assignment of Certificate of Deposit. Under 
30 CFR 243.4, appellants are required to submit their contact and 
surety amount information on a surety instrument to obtain the benefit 
of suspension of an obligation to comply with an order. 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.
    This information collection is currently approved by OMB. Form MMS-
4437 is a new form for this ICR. Under 30 CFR 243.100(a), this form 
standardizes the information already collected. This form does not 
affect the burden hours.

Self-bonding

    For Federal leases, RSFA Section 4(l), as promulgated 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 guarantor or appellant is financially solvent 
or 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 a consolidated balance sheet, subject to annual 
audit. In some cases, MMS also requires copies of the most recent tax 
returns--up to 3 years--filed by appellants.
    In addition, appellants must annually submit financial statements, 
subject to annual audit, to support their net worth. The MMS uses the 
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 a 
consolidated balance sheet documenting their net worth, or if 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.

U.S. Treasury Securities

    Appellants may choose to secure their debts by requesting to use a 
U.S. Treasury Security (TS). Appellants must file the letter of request 
with MMS prior to the invoice due date. 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). 
The MMS only accepts a book-entry TS.
    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 their duties and may also result in 
loss of royalty payments.
    Frequency: Annually and on occasion.
    Estimated Number and Description of Respondents: 300 Federal/Indian 
appellants.
    Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 300 
hours.
    The following chart shows the breakdown of the estimated annual 
burden hours by CFR section and paragraph. We have not included in our 
estimates certain requirements performed in the normal course of 
business and considered usual and customary.

                                   Respondents' Estimated Annual Burden Hours
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                                                                                 Average number
     Citation 30 CFR 243         Reporting and recordkeeping      Hour burden       of annual      Annual burden
                                         requirement                                responses          hours
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                                          Subpart A--General Provisions
----------------------------------------------------------------------------------------------------------------
243.4(a)(1)..................  How do I suspend compliance                   1  200.............             200
                                with an order?.                                 surety
                               (a) If you timely appeal an                       instruments
                                order, and if that order or                      (including
                                portion of that order: (1)                       Forms MMS-4435,
                                Requires you to make a                           MMS-4436, and
                                payment, and you want to                         MMS-4437, or
                                suspend compliance with that                     TS).
                                order, you must post a bond or
                                other surety instrument or
                                demonstrate financial solvency
                                * * *.
243.6........................  When must I or another person    Burden hours covered under Sec.   243.4(a)(1).
                                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 hours covered under Sec.   243.4(a)(1).
                                posting a bond or other 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 * * *.

[[Page 35701]]

 
243.8(a)(2) and (b)(2).......  When will MMS suspend my         Burden hours covered under Sec.   243.4(a)(1).
                                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 hours covered under Sec.   243.4(a)(1).
                                amount of my bond or other
                                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 financial                1  100.............             100
                                solvency?                                       self-bonding
                               (a) To demonstrate financial                      submissions
                                solvency under this part, you                    (demonstration
                                must submit an audited                           of financial
                                consolidated balance sheet,                      solvency).
                                and, if requested by the MMS
                                bond-approving officer, up to
                                3 years of tax returns to the
                                MMS, * * *.
                               (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 am   Burden hours covered under Sec.  Sec.
 (c)(2)(ii) and 243.201(d)(2).  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 hours covered under Sec.   243.4(a)(1).
                                financial solvency?
                               * * * (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: There are no additional recordkeeping costs associated with 
this information collection. However, MMS estimates 15 appellants will 
pay MMS a $50 fee to obtain credit data from a business information or 
credit reporting service as a ``non-hour'' cost burden over the next 
three years, or 5 appellants per year.
    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

[[Page 35702]]

* * *.'' 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 61522), 
announcing that we would submit this ICR to OMB for approval. The 
notice provided the required 60-day comment period. We received no 
comments in response to the 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. 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 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: March 14, 2005.
Lucy Querques Denett,
Associate Director for Minerals Revenue Management.
[FR Doc. 05-12135 Filed 6-20-05; 8:45 am]
BILLING CODE 4310-MR-P