[Federal Register Volume 70, Number 140 (Friday, July 22, 2005)]
[Notices]
[Pages 42366-42377]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-14528]


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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 1010-0136).

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

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 new title of this information collection request (ICR) is 
titled ``30 CFR PART 206--PRODUCT VALUATION, subpart C--Federal Oil and 
subpart D--Federal Gas (Form MMS-4393, Request to Exceed Regulatory 
Allowance Limitation).'' We changed the title of this information 
collection request (ICR) to clarify the regulatory language we are 
covering under 30 CFR part 206, and to incorporate relevant portions of 
three previous ICRs. The three ICRs, now consolidated into this ICR, 
were previously titled:
     1010-0095: 30 CFR Part 206--Product Valuation (Request to 
Exceed Transportation and Processing Allowance Limitation), subpart B--
Indian Oil, Sec.  206.54(b)(2); subpart C--Federal Oil, Sec.  
206.109(c)(2); subpart D--Federal Gas, Sec. Sec.  206.156(c)(3), 
206.158(c)(3), and 206.158(d)(2)(i); and subpart E--Indian Gas, 
Sec. Sec.  206.177(c)(2) and 206.177(c)(3);
     1010-0136: 30 CFR 206--subpart C, Federal Oil Valuation; 
and
     1010-0157: 30 CFR 206--subpart C, Federal Oil.
    Citations concerning Indian oil and gas, referred to in the above 
three ICRs, are currently covered in ICR 1010-0103.

DATES: Submit written comments on or before September 20, 2005.

[[Page 42367]]


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 206--PRODUCT VALUATION, subpart C--Federal Oil 
and subpart D--Federal Gas (Form MMS-4393, Request to Exceed Regulatory 
Allowance Limitation).
    OMB Control Number: 1010-0136.
    Bureau Form Number: Form MMS-4393.
    Abstract: The 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 of the Interior 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 MMS assists the Secretary in performing the 
royalty management functions.
    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 paid appropriately.
    Section 101(a) of the Federal Oil and Gas Royalty Management Act of 
1982 (FOGRMA), as amended, requires that the Secretary ``establish a 
comprehensive inspection, collection, and fiscal and production 
accounting and auditing system to provide the capability to accurately 
determine oil and gas royalties, interest, fines, penalties, fees, 
deposits, and other payments owed, and collect and account for such 
amounts in a timely manner.'' In order to accomplish these tasks, MMS 
developed valuation regulations for Federal leases at 30 CFR part 206--
Product Valuation. Market value is a basic principle underlying royalty 
valuation. Consequently, these regulations include methods to capture 
the true market value of crude oil and gas produced from Federal 
leases, both onshore and offshore. The valuation regulations at 30 CFR 
part 206 require companies to collect and/or submit information used to 
value their Federal oil and gas.
    The MMS uses the information collected to ensure that proper 
royalty is paid on oil and gas produced from Federal onshore and 
offshore leases. Please refer to the chart for all reporting 
requirements and associated burden hours. Regulations developed ensure 
the information requested is the minimum necessary to carry out our 
mission and places the least possible burden on respondents. The 
requested information provides a critical link to establishing the 
proper value of oil and gas from Federal lands. If the information is 
not collected, it may result in a loss of royalties for both Federal 
and state governments.

Transportation and Processing Allowances

    Under certain circumstances, lessees are authorized to claim a 
transportation allowance for the reasonable actual costs of 
transporting the royalty portion of produced oil and gas from the lease 
to a processing or sales point not in the immediate lease area.
    When gas is processed for the recovery of gas plant products, 
lessees may claim a processing allowance. Transportation and processing 
allowances are a part of the product valuation process that MMS uses to 
determine if the lessee is reporting and paying the proper royalty 
amount.
    The regulations establish a limit on transportation allowance 
deductions for oil and gas at 50 percent of the value of the oil and 
gas at the point of sale. The MMS may approve a transportation 
allowance in excess of 50 percent upon proper application from the 
lessee. Similarly, the regulations establish a limit of 66\2/3\ percent 
of the value of each gas plant product as an allowable gas processing 
deduction. The MMS may also approve a processing allowance in excess of 
66\2/3\ percent upon proper application from the lessee.

Request To Exceed Regulatory Allowance Limitation

    The MMS may approve an allowance exceeding the regulatory allowance 
limit upon proper application from the lessee. To request permission to 
exceed a regulatory allowance limit, lessees must write a letter to MMS 
explaining why a higher allowance limit is necessary and provide 
supporting documentation. The MMS developed Form MMS-4393, Request to 
Exceed Regulatory Allowance Limitation, to accompany the lessee's 
letter requesting approval to exceed the regulatory allowance limit. 
This form provides MMS with the data necessary to make a decision and 
track deductions on royalty reports. Data reported on the form is also 
subject to subsequent audit and adjustment.
    Proprietary information submitted to MMS under this collection is 
protected, and no items of a sensitive nature are collected. A response 
is mandatory for valuation requirements and required to obtain the 
benefit of allowances.

Applicable Citations

    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); the 
Mineral Leasing Act of 1920, Section 36, as amended (30 U.S.C. 192); 
Outer Continental Shelf Lands Act of 1953, Section 27, as amended (43 
U.S.C. 1353); 30 U.S.C. 189 pertaining to Public Lands; 30 U.S.C. 359 
pertaining to Acquired Lands; and 43 U.S.C. 1334 pertaining to OCS 
Lands. Public laws pertaining to mineral royalties are located on our 
Web site at http://www.mrm.mms.gov/Laws_R_D/PublicLawsAMR.htm.
    The applicable regulations include 30 CFR part 206--Product 
Valuation. In addition, we also are including applicable citations from 
the 2004 Federal Oil Valuation Rule (69 FR 24959, published May 5, 
2004) and the 2005 Federal Gas Valuation Rule (70 FR 11869, published 
March 10, 2005).

[[Page 42368]]

    Frequency of Response: Monthly, and when necessary, annually.
    Estimated Number and Description of Respondents: 100 Federal 
lessees.
    Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 
21,815 hours.
    We are revising this ICR to include non-standard reporting 
requirements that were overlooked in the previous renewal, and we have 
adjusted the burden hours accordingly. The hours also reflect our 
recent analysis related to the implementation of the 2004 Federal Oil 
Valuation rule and the 2005 Federal Gas Valuation rule. We have not 
included in our estimates certain requirements performed in the normal 
course of business and considered usual and customary. The following 
chart shows the breakdown of the estimated burden hours by CFR section 
and paragraph:

                                   Respondents' Estimated Annual Burden Hours
----------------------------------------------------------------------------------------------------------------
                                                                                  Average number
       Citation 30 CFR 206          Reporting and recordkeeping     Hour burden      of annual     Annual burden
                                            requirement                              responses         hours
----------------------------------------------------------------------------------------------------------------
                                             Subpart C--Federal Oil
----------------------------------------------------------------------------------------------------------------
  Sec.   206.102 How do I calculate royalty value for oil that I or my affiliate sell(s) under an arm's-length
                                                    contract?
----------------------------------------------------------------------------------------------------------------
206.102(e)(1)....................  206.102(e) If you value oil     PRODUCE RECORDS--The ORA determined that the
                                    under paragraph (a) of this       audit process is not covered by the PRA
                                    section: (1) MMS may require   because MMS staff asks non-standard questions
                                    you to certify that your or               to resolve exceptions.
                                    your affiliate's arm's-
                                    length contract provisions
                                    include all of the
                                    consideration the buyer must
                                    pay, either directly or
                                    indirectly, for the oil.
----------------------------------
               Sec.   206.103 How do I value oil that is not sold under an arm's-length contract?
----------------------------------------------------------------------------------------------------------------
206.103..........................  This section explains how to            33.25               5          166.25
                                    value oil that you may not
                                    value under Sec.   206.102
                                    or that elect under Sec.
                                    206.102(d) to value under
                                    this section. First
                                    determine whether paragraph
                                    (a), (b), or (c) of this
                                    section applies to
                                    production from your lease,
                                    or whether you may apply
                                    paragraph (d) or (e) with
                                    MMS approval.
206.103(a).......................  206.103 (a) Production from
                                    leases in California or
                                    Alaska. Value is the average
                                    of the daily mean ANS spot
                                    prices published in any MMS-
                                    approved publication during
                                    the trading month most
                                    concurrent with the
                                    production month * * *
                                   (1) To calculate the daily
                                    mean spot price * * *.
                                   (2) Use only the days * * *..
                                   (3) You must adjust the value
                                    * * *.
206.103(a)(4)....................  206.103(a)(4) After you                     8               2              16
                                    select an MMS-approved
                                    publication, you may not
                                    select a different
                                    publication more often than
                                    once every 2 years, * * *.
206.103(b)(1)....................  206.103(b) Production from                400               2             800
                                    leases in the Rocky Mountain
                                    Region. * * * (1) If you
                                    have an MMS-approved
                                    tendering program, you must
                                    value oil * * *.
206.103(b)(1)(ii)................  206.103(b)(1)(ii) If you do               400               2             800
                                    not have an MMS-approved
                                    tendering program, you may
                                    elect to value your oil
                                    under either paragraph
                                    (b)(2) or (b)(3) of this
                                    section. * * *.
206.103(b)(4)....................  206.103(b)(4) If you                      400               2             800
                                    demonstrate to MMS's
                                    satisfaction that paragraphs
                                    (b)(1) through (b)(3) of
                                    this section result in an
                                    unreasonable value for your
                                    production as a result of
                                    circumstances regarding that
                                    production, the MMS Director
                                    may establish an alternative
                                    valuation method.
206.103(c)(1)....................  206.103(c) Production from                 50              10             500
                                    leases not located in
                                    California, Alaska or the
                                    Rocky Mountain Region. (1)
                                    Value is the NYMEX price,
                                    plus the roll, adjusted for
                                    applicable location and
                                    quality differentials and
                                    transportation costs under
                                    Sec.   206.112.
206.103(e)(1)....................  206.103(e) Production                     330               2             660
                                    delivered to your refinery
                                    and the NYMEX price or ANS
                                    spot price is an
                                    unreasonable value. (1) * *
                                    * you may apply to the MMS
                                    Director to establish a
                                    value representing the
                                    market at the refinery if: *
                                    * *.
206.103(e)(2)....................  206.103(e)(2) You must         ..............  ..............  ..............
                                    provide adequate
                                    documentation and evidence
                                    demonstrating the market
                                    value at the refinery * * *.
----------------------------------
         Sec.   206.105 What records must I keep to support my calculations of value under this subpart?
----------------------------------------------------------------------------------------------------------------
206.105..........................  206.105 If you determine the     There are no burden hours to report in this
                                    value of your oil under this  ICR. All burden hours associated with Form MMS-
                                    subpart, you must retain all   2014 are included in OMB Control Number 1010-
                                    data relevant to the             0140 (Form MMS-2014), expires 10/31/2006.
                                    determination of royalty
                                    value. * * *.
----------------------------------
                             Sec.   206.107 How do I request a value determination?
----------------------------------------------------------------------------------------------------------------
206.107(a).......................  206.107(a) You may request a              330               8           2,640
                                    330 82,640 value
                                    determination from MMS * * *.
----------------------------------

[[Page 42369]]

 
                 Sec.   206.109 When may I take a transportation allowance in determining value?
----------------------------------------------------------------------------------------------------------------
206.109(c)(2)....................  206.109(c) Limits on                     4.25               1            4.25
                                    transportation allowances.
                                    (2) You may ask MMS to
                                    approve a transportation
                                    allowance in excess of the
                                    limitation in paragraph
                                    (c)(1) of this section.
                                   * * * Your application for
                                    exception (using Form MMS-
                                    4393, Request to Exceed
                                    Regulatory Allowance
                                    Limitation) must contain all
                                    relevant and supporting
                                    documentation necessary for
                                    MMS to make a determination.
                                    * * *.
----------------------------------
   Sec.   206.110 How do I determine a transportation allowance under an arm's-length transportation contract?
----------------------------------------------------------------------------------------------------------------
206.110(a).......................  206.110(a) * * * You must be    PRODUCE RECORDS--The ORA determined that the
                                    able to demonstrate that you      audit process is not covered by the PRA
                                    or your affiliate's contract   because MMS staff asks non-standard questions
                                    is at arm's length. * * *.                to resolve exceptions.
                                                                 -----------------
206.110(d)(3)....................  216.110(d) If your arm's-
                                    length transportation
                                    contract includes more than
                                    one liquid product, and the
                                    transportation costs
                                    attributable to each product
                                    cannot be determined * * *
                                   (3) You may propose to MMS a              330               2             660
                                    cost allocation method * * *
206.110(e).......................  206.110(e) If your arm's-                 330               1             330
                                    length transportation
                                    contract includes both
                                    gaseous and liquid products,
                                    and the transportation costs
                                    attributable to each product
                                    cannot be determined from
                                    the contract, then you must
                                    propose an allocation
                                    procedure to MMS.
                                                                 -----------------
206.110(e)(1)....................  206.110(e)(1) * * * If MMS       There are no burden hours to report in this
                                    rejects your cost             ICR. All burden hours associated with Form MMS-
                                    allocation, you must amend     2014 are included in OMB Control Number 1010-
                                    your Form MMS-2014 * * *.        0140 (Form MMS-2014), expires 10/31/2006.
206.110(e)(2)....................  206.110(e)(2) You must submit    There are no burden hours to report in this
                                    your initial proposal,        ICR. All burden hours associated with Form MMS-
                                    including all available        2014 are included in OMB Control Number 1010-
                                    data, within 3 months after     0140, (Form MMS-2014), expires 10/31/2006.
                                    first claiming the allocated
                                    deductions on Form MMS-2014.
                                                                 -----------------
206.110(g)(2)....................  206.110(g) If your arm's-                 330               1             330
                                    length sales includes a
                                    provision reducing the
                                    contract price by a
                                    transportation factor, * * *
                                    (2) You must obtain MMS
                                    approval before claiming a
                                    transportation factor in
                                    excess of 50 percent of the
                                    base price of the product.
----------------------------------
  Sec.   206.111 How do I determine a transportation allowance if I do not have an arm's-length transportation
                                        contract or arm's-length tariff?
----------------------------------------------------------------------------------------------------------------
206.111(g).......................  206.111(g) To compute                     330               1             330
                                    depreciation, you may elect
                                    to use either * * * After
                                    you make an election, you
                                    may not change methods
                                    without MMS approval. * * *.
206.111(k)(2)....................  206.111(k)(2) You may propose             330               1             330
                                    to MMS a cost allocation
                                    method on the basis of the
                                    values * * *.
206.111(l)(1)....................  206.111(l)(1) Where you                   330               1             330
                                    transport both gaseous and
                                    liquid products through the
                                    same transportation system,
                                    you must propose a cost
                                    allocation procedure to MMS.
                                                                 -----------------
206.111(l)(2)....................  206.111(l)(2) * * * If MMS       There are no burden hours to report in this
                                    rejects your cost               ICR. All burden hours associated with your
                                    allocation, you must amend       Form MMS-2104 are included in OMB Control
                                    your Form MMS-2104 for the     Number 1010-0140 (Form MMS-2014), expires 10/
                                    month/months that you used                       31/2006.
                                    the rejected method and pay
                                    any additional royalty and
                                    interest due.
206.111(l)(3)....................  206.111(l)(3) You must submit     Burden covered under Sec.   206.111(l)(1).
                                    your initial proposal,
                                    including all available
                                    data, within 3 months after
                                    first claiming the allocated
                                    deductions on Form MMS-2014.
----------------------------------
  Sec.   206.112 What adjustments and transportation allowances apply when I value oil production from my lease
                                     using NYMEX prices or ANS spot prices?
----------------------------------------------------------------------------------------------------------------
206.112(a)(1)(ii)................  206.112(a)(1)(ii) * * * under             330               1             330
                                    an exchange agreement that
                                    is not at arm's length, you
                                    must obtain approval from
                                    MMS for a location and
                                    quality differential. * * *..

[[Page 42370]]

 
206.112(a)(1)(ii)................  206.112(a)(1)(ii) * * * If                330               2             660
                                    MMS prescribes a different
                                    differential, you must apply
                                    * * *. You must pay any
                                    additional royalties owed *
                                    * * plus the late payment
                                    interest from the original
                                    royalty due date, or you may
                                    report a credit * * *.
206.112(a)(3)....................  206.112(a)(3) If you                      330               4           1,320
                                    transport or exchange at
                                    arm's length (or both
                                    transport and exchange) at
                                    least 20 percent, but not
                                    all, of your oil produced
                                    from the lease to a market
                                    center, determine the
                                    adjustment between the lease
                                    and the market center for
                                    the oil that is not
                                    transported or exchanged (or
                                    both transported and
                                    exchanged) to or through a
                                    market center as follows: *
                                    * *.
206.112(a)(4)....................  206.112(a)(4) If you                      330               4           1,320
                                    transport or exchange (or
                                    both transport and exchange)
                                    less than 20 percent of your
                                    crude oil produced from the
                                    lease between the lease and
                                    a market center, you must
                                    propose to MMS an adjustment
                                    between the lease and the
                                    market center for the
                                    portion of the oil that you
                                    do not transport or exchange
                                    (or both transport and
                                    exchange) to a market
                                    center. * * *.
206.112(a)(4)....................  206.112(a)(4) If MMS
                                    prescribes a different
                                    adjustment * * *. You must
                                    pay any additional royalties
                                    owed * * * plus the late
                                    payment interest from the
                                    original royalty due date,
                                    or you may report a credit *
                                    * *.
206.112(b)(3)....................  206.112(b)(3) * * * you may               330               4           1,320
                                    propose an alternative
                                    differential to MMS. * * *
                                    If MMS prescribes a
                                    different differential * *
                                    *. You must pay any
                                    additional royalties owed *
                                    * * plus the late payment
                                    interest from the original
                                    royalty due date, or you may
                                    report a credit * * *.
206.112(c)(2)....................  206.112(c)(2) * * * If                    330               2             660
                                    quality bank adjustments do
                                    not incorporate or provide
                                    for adjustments for sulfur
                                    content, you may make sulfur
                                    adjustments, based on the
                                    quality of the
                                    representative crude oil at
                                    the market center, of 5.0
                                    cents per one-tenth percent
                                    difference in sulfur
                                    content, unless MMS approves
                                    a higher adjustment.
----------------------------------

[[Page 42371]]

 
        Sec.   206.114 What are my reporting requirements under an arm's-length transportation contract?
----------------------------------------------------------------------------------------------------------------
206.114..........................  206.114 You or your affiliate    There are no burden hours to report in this
                                    must use a entry on Form MMS  ICR. All burden hours associated with Form MMS-
                                    2014 to notify MMS of an       2014 are included in OMB Control Number 1010-
                                    allowance based on               0140 (Form MMS-2014), expires 10/31/2006.
                                    transportation costs you or
                                    your affiliate incur.
206.114..........................  206.114 MMS may require you     PRODUCE RECORDS--The ORA determined that the
                                    or your affiliate to submit       audit process is not covered by the PRA
                                    arm's-length transportation    because MMS staff asks non-standard questions
                                    contracts, production                     to resolve exceptions.
                                    agreements, operating
                                    agreements, and related
                                    documents.
----------------------------------
     Sec.   206.115 What are my reporting requirements under a non-arm's-length transportation arrangement?
----------------------------------------------------------------------------------------------------------------
206.115(a).......................  206.115(a) You or your           There are no burden hours to report in this
                                    affiliate must use a          ICR. All burden hours associated with Form MMS-
                                    separate entry on Form MMS-    2014 are included in OMB Control Number 1010-
                                    2014 to notify MMS of an         0140 (Form MMS-2014), expires 10/31/2006.
                                    allowance based on
                                    transportation costs you or
                                    your affiliate incur.
206.115(c).......................  206.115(c) MMS may require      PRODUCE RECORDS--The ORA determined that the
                                    you or your affiliate to          audit process is not covered by the PRA
                                    submit all data used to        because MMS staff asks non-standard questions
                                    calculate the allowance                   to resolve exceptions.
                                    deduction. * * *.
----------------------------------
                                             Subpart D--Federal Gas
----------------------------------------------------------------------------------------------------------------
                              Sec.   206.152 Valuation standards--unprocessed gas.
----------------------------------------------------------------------------------------------------------------
206.152(b)(1)(i).................  206.152(b)(1)(i) * * * The      PRODUCE RECORDS--The ORA determined that the
                                    lessee shall have the burden      audit process is not covered by the PRA
                                    of demonstrating that its      because MMS staff asks non-standard questions
                                    contract is arm's-length. *               to resolve exceptions.
                                    * *.
206.152(b)(1)(iii)...............  206.152(b)(1)(iii) * * * When   PRODUCE RECORDS--The ORA determined that the
                                    MMS determines that the           audit process is not covered by the PRA
                                    value may be unreasonable,     because MMS staff asks non-standard questions
                                    MMS will notify the lessee                to resolve exceptions.
                                    and give the lessee an
                                    opportunity to provide
                                    written information
                                    justifying the lessee's
                                    value.
                                                                 -----------------
206.152(b)(2)....................  206.152(b)(2) * * * The                   330               1             330
                                    lessee must request a value
                                    determination in accordance
                                    with paragraph (g) of this
                                    section for gas sold
                                    pursuant to a warranty
                                    contract; * * *.
                                                                 -----------------
206.152(b)(3)....................  206.152(b)(3) MMS may require   PRODUCE RECORDS--The ORA determined that the
                                    a lessee to certify that its      audit process is not covered by the PRA
                                    arm's-length contract          because MMS staff asks non-standard questions
                                    provisions include all of                 to resolve exceptions.
                                    the consideration to be paid
                                    by the buyer, either
                                    directly or indirectly, for
                                    the gas.
206.152(e)(1)....................  206.152(e)(1) Where the value    There are no burden hours to report in this
                                    is determined pursuant to     ICR. All burden hours associated with Form MMS-
                                    paragraph (c) of this          2014 are included in OMB Control Number 1010-
                                    section, the lessee shall        0140 (Form MMS-2014), expires 10/31/2006.
                                    retain all data relevant to
                                    the determination of royalty
                                    value. * * *.
206.152(e)(2)....................  206.152(e)(2) Any Federal       PRODUCE RECORDS--The ORA determined that the
                                    lessee will make available        audit process is not covered by the PRA
                                    upon request to the            because MMS staff asks non-standard questions
                                    authorized MMS or State                   to resolve exceptions.
                                    representatives, to the
                                    Office of the Inspector
                                    General of the department of
                                    the Interior, or other
                                    person authorized to receive
                                    such information, arm's-
                                    length sales and volume data
                                    for like-quality production
                                    sold, purchased or otherwise
                                    obtained by the lessee from
                                    the field or area or from
                                    nearby fields or areas.
                                                                 -----------------
206.152(e)(3)....................  206.152(e)(3) A lessee shall              330               2             660
                                    notify MMS if it has
                                    determined value pursuant to
                                    paragraph (c)(2) or (c)(3)
                                    of this section. * * *.
206.152(g).......................  206.152(g) The lessee may                 330               6           1,980
                                    request a value
                                    determination from MMS. * *
                                    * the lessee shall submit
                                    all available data relevant
                                    to its proposal. * * *.
----------------------------------

[[Page 42372]]

 
                               Sec.   206.153 Valuation standards--processed gas.
----------------------------------------------------------------------------------------------------------------
206.153(b)(1)(i).................  206.153(b)(1)(i) * * * The       PRODUCE RECORDS--The ORA determined that the
                                    lessee shall have the burden      audit process is not covered by the PRA
                                    of demonstrating that its      because MMS staff asks non-standard questions
                                    contract is arm's-length. *               to resolve exceptions.
                                    * *.
206.153(b)(1)(iii)...............  206.153(b)(1)(iii) * * * When   PRODUCE RECORDS--The ORA determined that the
                                    MMS determines that the           audit process is not covered by the PRA
                                    value may be unreasonable,     because MMS staff asks non-standard questions
                                    MMS will notify the lessee                to resolve exceptions.
                                    and give the lessee an
                                    opportunity to provide
                                    written information
                                    justifying the lessee's
                                    value.
                                                                 -----------------
206.153(b)(2)....................  206.153(b)(2) * * * The                   330               1             330
                                    lessee must request a value
                                    determination in accordance
                                    with paragraph (g) of this
                                    section for gas sold
                                    pursuant to a warranty
                                    contract; * * *.
                                                                 -----------------
206.153(b)(3)....................  206.153(b)(3) MMS may require   PRODUCE RECORDS--The ORA determined that the
                                    a lessee to certify that its      audit process is not covered by the PRA
                                    arm's-length contract          because MMS staff asks non-standard questions
                                    provisions include all of                 to resolve exceptions.
                                    the consideration to be paid
                                    by the buyer, either
                                    directly or indirectly, for
                                    the residue gas or gas plant
                                    product.
206.153(e)(1)....................  206.153(e)(1) Where the value    There are no burden hours to report in this
                                    is determined pursuant to     ICR. All burden hours associated with Form MMS-
                                    paragraph (c) of this          2014 are included in OMB Control Number 1010-
                                    section, the lessee shall        0140 (Form MMS-2014), expires 10/31/2006.
                                    retain all data relevant to
                                    the determination of royalty
                                    value. * * *.
206.153(e)(2)....................  206.153(e)(2) Any Federal       PRODUCE RECORDS--The ORA determined that the
                                    lessee will make available        audit process is not covered by the PRA
                                    upon request to the            because MMS staff asks non-standard questions
                                    authorized MMS or State                   to resolve exceptions.
                                    representatives, to the
                                    Office of the Inspector
                                    General of the Department of
                                    the Interior, or other
                                    persons authorized to
                                    receive such information,
                                    arm's-length sales and
                                    volume data for like-quality
                                    residue gas and gas plant
                                    products sold, purchased or
                                    otherwise obtained by the
                                    lessee from the same
                                    processing plant or from
                                    nearby processing plants.
                                                                 -----------------
206.153(e)(3)....................  206.153(e)(2) A lessee shall              330               2             660
                                    notify MMS if it has
                                    determined any value
                                    pursuant to paragraph (c)(2)
                                    or (c)(3) of this section. *
                                    * *.
206.153(g).......................  206.153(g) The lessee may                 330               4           1,320
                                    request a value
                                    determination from MMS * * *
                                    the lessee shall submit all
                                    available data relevant to
                                    its proposal. * * *.
----------------------------------
                Sec.   206.154 Determination of quantities and qualities for computing royalties.
----------------------------------------------------------------------------------------------------------------
206.154(c)(4)....................  206.154(c)(4) * * * A lessee              330               1             330
                                    may request MMS approval of
                                    other methods for
                                    determining the quantity of
                                    residue gas and gas plant
                                    products allocable to each
                                    lease. * * *.
----------------------------------
                               Sec.   206.156 Transportation allowances--general.
----------------------------------------------------------------------------------------------------------------
206.156(c)(3)....................  206.156(c)(3) Upon request of            4.25               4              17
                                    a lessee, MMS may approve a
                                    transportation allowance
                                    deduction in excess of the
                                    limitation prescribed by
                                    paragraphs (c)(1) and (c)(2)
                                    of this section. * * * An
                                    application for exception
                                    (using Form MMS-4393,
                                    Request to Exceed Regulatory
                                    Allowance Limitation) shall
                                    contain all relevant and
                                    supporting documentation
                                    necessary for MMS to make a
                                    determination. * * *.
----------------------------------

[[Page 42373]]

 
                           Sec.   206.157 Determination of transportation allowances.
----------------------------------------------------------------------------------------------------------------
206.157(a)(1)(i).................  206.157(a) Arm's-length         PRODUCE RECORDS--The ORA determined that the
                                    transportation contracts.         audit process is not covered by the PRA
                                    (1)(i) * * * The lessee        because MMS staff asks non-standard questions
                                    shall have the burden of                  to resolve exceptions.
                                    demonstrating that its
                                    contract is arm's-length. *
                                    * *.
206.157(a)(1)(i).................  206.157(a)(1)(i) * * * The       There are no burden hours to report in this
                                    lessee must claim a           ICR. All burden hours associated with Form MMS-
                                    transportation allowance by    2014 are included in OMB Control Number 1010-
                                    reporting it on a separate       0140 (Form MMS-2014), expires 10/31/2006.
                                    line entry on the Form MMS-
                                    2014.
206.157(a)(1)(iii)...............  206.157(a)(1)(iii) * * * When   PRODUCE RECORDS--The ORA determines that the
                                    MMS determines that the           audit process is not covered by the PRA
                                    value of the transportation    because MMS staff asks non-standard questions
                                    may be unreasonable, MMS                  to resolve exceptions.
                                    will notify the lessee and
                                    give the lessee an
                                    opportunity to provide
                                    written information
                                    justifying the lessee's
                                    transportation costs.
                                                                 -----------------
206.157(a)(2)(ii)................  206.157(a)(2)(ii) * * * the               330               1             330
                                    lessee may propose to MMS a
                                    cost allocation method on
                                    the basis of the values of
                                    the products transported. *
                                    * *.
206.157(a)(3)....................  206.157(a)(3) If an arm's-                330               1             330
                                    length transportation
                                    contract includes both
                                    gaseous and liquid products
                                    and the transportation costs
                                    attributable to each cannot
                                    be determined from the
                                    contract, the lessee shall
                                    propose an allocation
                                    procedure to MMS. *** The
                                    lessee shall submit all
                                    relevant data to support its
                                    proposal. * * *.
206.157(a)(5)....................  206.157(a)(5) * * * The                   100               1             100
                                    transportation factor may
                                    not exceed 50 percent of the
                                    base price of the product
                                    without MMS approval.
                                                                 -----------------
206.157(b)(1)....................  206.157(b) Non-arm's-length      There are no burden hours to report in this
                                    or no contract. (1) The       ICR. All burden hours associated with Form MMS-
                                    lessee must claim a            2014 are included in OMB Control Number 1010-
                                    transportation allowance by      0140 (Form MMS-2014), expires 10/31/2006.
                                    reporting it on a separate
                                    line entry on the Form MMS-
                                    2014. * * *.
206.157(b)(2)(iv)................  206.157(b)(2)(iv) After a                 100               1             100
                                    lessee has elected to use
                                    either method for a
                                    transportation system, the
                                    lessee may not later elect
                                    to change to the other
                                    alternative without approval.
206.157(b)(2)(iv)(A).............  After an election is made,
                                    the lessee may not change
                                    methods without MMS
                                    approval. * * *.
206.157(b)(3)(i).................  206.157(b)(3)(i) * * * Except             100               1             100
                                    as provided in this
                                    paragraph, the lessee may
                                    not take an allowance for
                                    transporting a product which
                                    is not royalty bearing
                                    without MMS approval.
206.157(b)(3)(ii)................  206.157(b)(3)(ii) * * * the               100               1             100
                                    lessee may propose to the
                                    MMS a cost allocation method
                                    on the basis of the values
                                    of the products transported.
206.157(b)(4)....................  206.157(b)(4) Where both                  100               1             100
                                    gaseous and liquid products
                                    are transported through the
                                    same transportation system,
                                    the lessee shall propose a
                                    cost allocation procedure to
                                    MMS. * * * The lessee shall
                                    submit all relevant data to
                                    support its proposal. * * *.

[[Page 42374]]

 
206.157(b)(5)....................  206.157(b)(5) You may apply               100               1             100
                                    for an exception from the
                                    requirement to compute
                                    actual costs under
                                    paragraphs (b)(1) through
                                    (b)(4) of this section.
                                                                 -----------------
206.157(c)(1)(i).................  206.157(c) Reporting             There are no burden hours to report in this
                                    Requirements. (1) Arm's-      ICR. All burden hours associated with Form MMS-
                                    length contracts. (i) You      2014 are included in OMB Control Number 1010-
                                    must use a separate entry on     0140 (Form MMS-2014), expires 10/31/2006.
                                    Form MMS-2014 to notify MMS
                                    of a transportation
                                    allowance.
206.157(c)(1)(ii)................  206.157(c)(1)(ii) The MMS may   PRODUCE RECORDS--The ORA determined that the
                                    require you to submit arm's-      audit process is not covered by the PRA
                                    lenth transportation           because MMS staff asks non-standard questions
                                    contracts, production                     to resolve exceptions.
                                    agreements, operating
                                    agreements, and related
                                    documents. * * *.
206.157(c)(2)(i).................  206.157(c)(2) Non-arm's-         There are no burden hours to report in this
                                    length or no contract. (i)    ICR. All burden hours associated with Form MMS-
                                    You must use a separate        2014 are included in OMB Control Number 1010-
                                    entry on Form MMS-2014 to        0140 (Form MMS-2014), expires 10/31/2006.
                                    notify MMS of a
                                    transportation allowance.
206.157(c)(2)(iii)...............  206.157(c)(2)(iii) The MMS      PRODUCE RECORDS--The ORA determined that the
                                    may require you to submit         audit process is not covered by the PRA
                                    all data used to calculate     because MMS staff asks non-standard questions
                                    the allowance deduction. * *              to resolve exceptions.
                                    *.
206.157(e)(2)....................  206.157(e) Adjustments. (2)      There are no burden hours to report in this
                                    For lessees transporting      ICR. All burden hours associated with Form MMS-
                                    production from onshore        2014 are included in OMB Control Number 1010-
                                    Federal leases, the lessee       0140 (Form MMS-2014), expires 10/31/2006.
                                    must submit a corrected Form
                                    MMS-2014 to reflect actual
                                    costs, together with any
                                    payment, in accordance with
                                    instructions provided by MMS.
206.157(e)(3)....................  206.157(e)(3) For lessees        There are no burden hours to report in this
                                    transporting gas production   ICR. All burden hours associated with Form MMS-
                                    from leases on the OCS, if     2014 are included in OMB Control Number 1010-
                                    the lessee's estimated           0140 (Form MMS-2014), expires 10/31/2006.
                                    transportation allowance
                                    exceeds the allowance based
                                    on actual costs, the lessee
                                    must submit a corrected Form
                                    MMS-2014 to reflect actual
                                    costs, together with its
                                    payments, in accordance with
                                    instructions provided by
                                    MMS. * * *.
206.157(f)(1)....................  206.157(f) Allowable costs in    There are no burden hours to report in this
                                    determining transportation    ICR. All burden hours associated with Form MMS-
                                    allowances. * * * (1) Firm     2014 are included in OMB Control Number 1010-
                                    demand charges paid to           0140 (Form MMS-2014), expires 10/31/2006.
                                    pipelines. * * * if you
                                    receive a payment or credit
                                    from the pipeline for
                                    penalty refunds, rate case
                                    refunds, or other reasons,
                                    you must reduce the firm
                                    demand charge claimed on the
                                    Form MMS-2014 by the amount
                                    of that payment. You must
                                    modify Form MMS-2014 by the
                                    amount received or credited
                                    for the affected reporting
                                    period and pay any resulting
                                    royalty and late payment
                                    interest due; * * *.
----------------------------------
                                 Sec.   206.158 Processing allowances--general.
----------------------------------------------------------------------------------------------------------------
206.158(c)(3)....................  206.158(c)(3) Upon request of            4.25              17           72.25
                                    a lessee, MMS may approve a
                                    processing allowance in
                                    excess of the limitation
                                    prescribed by paragraph
                                    (c)(2) of this section. * *
                                    * An application for
                                    exception (using Form MMS-
                                    4393, Request to Exceed
                                    Regulatory Allowance
                                    Limitation) shall contain
                                    all relevant and supporting
                                    documentation for MMS to
                                    make a determination. * * *.

[[Page 42375]]

 
206.158(d)(2)(i).................  206.158(d)(2)(i) If the                   9.5               2              19
                                    lessee incurs extraordinary
                                    costs for processing gas
                                    production from a gas
                                    production operation, it may
                                    apply to MMS for an
                                    allowance for those costs *
                                    * *.
                                                                 -----------------
206.158(d)(2)(ii)................  206.158(d)(2)(ii) * * * to       There are no burden hours to report in this
                                    retain the authority to       ICR. All burden hours associated with Form MMS-
                                    deduct the allowance the       2014 are included in OMB Control Number 1010-
                                    lessee must report the           0140 (Form MMS-2014), expires 10/31/2006.
                                    deduction to MMS in a form
                                    and manner prescribed by MMS.
----------------------------------
                             Sec.   206.159 Determination of processing allowances.
----------------------------------------------------------------------------------------------------------------
206.159(a)(1)(i).................  206.159(a) Arm's-length          PRODUCE RECORDS--The ORA determined that the
                                    processing contracts. (1)(i)      audit process is not covered by the PRA
                                    * * * The lessee shall have    because MMS staff asks non-standard questions
                                    the burden of demonstrating               to resolve exceptions.
                                    that its contract is arm's-
                                    length. * * *.
206.159(a)(1)(i).................  206.159(a)(1)(i) * * * The       There are no burden hours to report in this
                                    lessee must claim a           ICR. All burden hours associated with Form MMS-
                                    transportation allowance by    2014 are included in OMB Control Number 1010-
                                    reporting it on a separate      0140. (Form MMS-2014), expires 10/31/2006.
                                    line entry on the Form MMS-
                                    2014.
206.159(a)(1)(iii)...............  206.159(a)(1)(iii) * * * When    PRODUCE RECORDS--The ORA determined that the
                                    MMS determines that the           audit process is not covered by the PRA
                                    value of the processing may    because MMS staff asks non-standard questions
                                    be unreasonable, MMS will                 to resolve exceptions.
                                    notify the lessee and give
                                    the lessee an opportunity to
                                    provide written information
                                    justifying the lessee's
                                    processing costs.
                                                                 -----------------
206.159(a)(3)....................  206.159(a)(3) If an arm's-                330               1             330
                                    length processing contract
                                    includes more than one gas
                                    plant product and the
                                    processing costs
                                    attributable to each product
                                    cannot be determined from
                                    the contract, the lessee
                                    shall propose an allocation
                                    procedure to MMS. * * * The
                                    lessee shall submit all
                                    relevant data to support its
                                    proposal. * * *.
                                                                 -----------------
206.159(b)(1)....................  206.159(b) Non-arm's-length      There are no burden hours to report in this
                                    or no contract. (1) * * *     ICR. All burden hours associated with Form MMS-
                                    The lessee must claim a        2014 are included in OMB Control Number 1010-
                                    processing allowance by          0140 (Form MMS-2014), expires 10/31/2006.
                                    reflecting it as a separate
                                    line entry on the Form MMS-
                                    2014. * * *.
                                                                 -----------------
206.159(b)(2)(iv)................  206.159(b)(2)(iv) * * * When              100               1             100
                                    a lessee has elected to use
                                    either method for a
                                    processing plant, the lessee
                                    may not later elect to
                                    change to the alternative
                                    without approval of the MMS.
206.159(b)(2)(iv)(A).............  206.159(b)(2)(iv)(A) * * *     ..............  ..............  ..............
                                    After an election is made,
                                    the lessee may not change
                                    methods without MMS
                                    approval. * * *.

[[Page 42376]]

 
206.159(b)(4)....................  206.159(b)(4) A lessee may                100               1             100
                                    apply to MMS for an
                                    exception from the
                                    requirements that it compute
                                    actual costs in accordance
                                    with paragraphs (b)(1)
                                    through (b)(3) of this
                                    section. * * *.
206.159(c)(1)(i).................  206.159(c) Reporting             There are no burden hours to report in this
                                    requirements--(1) Arm's-      ICR. All burden hours associated with Form MMS-
                                    length contracts. (i) The      2014 are included in OMB Control Number 1010-
                                    lessee must notify MMS of an     0140 (Form MMS-2014), expires 10/31/2006.
                                    allowance based on incurred
                                    costs by using a separate
                                    line entry on the Form MMS-
                                    2014.
206.159(c)(1)(ii)................  206.159(c)(1)(ii) The MMS may    PRODUCE RECORDS--The ORA determined that the
                                    require that a lessee submit      audit process is not covered by the PRA
                                    arm's-length processing        because MMS staff asks non-standard questions
                                    contracts and related                     to resolve exceptions.
                                    documents.* * *.
206.159(c)(2)(i).................  206.159(c)(2) Non-arm's-         There are no burden hours to report in this
                                    length or no contract. (i)    ICR. All burden hours associated with Form MMS-
                                    The lessee must notify MMS     2014 are included in OMB Control Number 1010-
                                    of an allowance based on         0140 (Form MMS-2014), expires 10/31/2006.
                                    incurred costs by using a
                                    separate line entry on the
                                    Form MMS-2014.
206.159(c)(2)(iii)...............  206.159(c)(2)(iii) Upon          PRODUCE RECORDS--The ORA determined that the
                                    request by MMS, the lessee        audit process is not covered by the PRA
                                    shall submit all data used     because MMS staff asks non-standard questions
                                    to prepare the allowance                  to resolve exceptions.
                                    deduction. * * *.
206.159(e)(2)....................  206.159(e) Adjustments. (2)      There are no burden hours to report in this
                                    For lessees processing        ICR. All burden hours associated with Form MMS-
                                    production from onshore        2014 are included in OMB Control Number 1010-
                                    Federal leases, the lessee       0140 (Form MMS-2014), expires 10/31/2006.
                                    must submit a corrected Form
                                    MMS-2014 to reflect actual
                                    costs, together with any
                                    payment, in accordance with
                                    instructions provided by MMS.
206.159(e)(3)....................  206.159(e)(3) For lessees        There are no burden hours to report in this
                                    processing gas production     ICR. All burden hours associated with Form MMS-
                                    from leases on the OCS, if     2014 are included in OMB Control Number 1010-
                                    the lessee's estimated           0140 (Form MMS-2014), expires 10/31/2006.
                                    processing allowance exceeds
                                    the allowance based on
                                    actual costs, the lessee
                                    must submit a corrected Form
                                    MMS-2014 to reflect actual
                                    costs, together with its
                                    payment, in accordance with
                                    instructions provided by
                                    MMS. * * *.
                                                                 -----------------
    Total........................  .............................  ..............             109          21,815
----------------------------------------------------------------------------------------------------------------

    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 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

[[Page 42377]]

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: July 14, 2005.
Richard Adamski,
Acting Associate Director for Minerals Revenue Management.
[FR Doc. 05-14528 Filed 7-21-05; 8:45 am]
BILLING CODE 4310-MR-P