[Federal Register Volume 71, Number 50 (Wednesday, March 15, 2006)]
[Notices]
[Pages 13420-13422]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-3705]


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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 extension of an information collection (1010-0071).

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SUMMARY: To comply with the Paperwork Reduction Act of 1995 (PRA), we 
are inviting comments on a collection of information that we will 
submit to the Office of Management and Budget (OMB) for review and 
approval. The information collection request (ICR) concerns the 
paperwork requirements in the regulations under 30 CFR 203, ``Relief or 
Reduction in Royalty Rates.''

DATES: Submit written comments by May 15, 2006.

ADDRESSES: You may submit comments by any of the following methods 
listed below. Please use the Information Collection Number 1010-0071 as 
an identifier in your message.
     Public Connect on-line commenting system, https://ocsconnect.mms.gov. Follow the instructions on the Web site for 
submitting comments.
     E-mail MMS at [email protected]. Identify with 
Information Collection Number 1010-0071 in the subject line.
     Fax: 703-787-1093. Identify with Information Collection 
Number 1010-0071.
     Mail or hand-carry comments to the Department of the 
Interior; Minerals Management Service; Attention: Rules Process Team 
(RPT); 381 Elden Street, MS-4024; Herndon, Virginia 20170-4817. Please 
reference ``Information Collection 1010-0071'' in your comments.

FOR FURTHER INFORMATION CONTACT: Cheryl Blundon, Rules Processing Team 
at (703) 787-1600. You may also contact Cheryl Blundon to obtain a 
copy, at no cost, of the regulations that require the subject 
collection of information.

SUPPLEMENTARY INFORMATION:
    Title: 30 CFR 203, Relief or Reduction in Royalty Rates.
    OMB Control Number: 1010-0071.
    Abstract: The Outer Continental Shelf (OCS) Lands Act, as amended 
by Public Law 104-58, Deep Water Royalty Relief Act (DWRRA), gives the 
Secretary of the Interior (Secretary) the authority to reduce or 
eliminate royalty or any net profit share specified in OCS oil and gas 
leases to promote increased production. The DWRRA also authorized the 
Secretary to suspend royalties when necessary to promote development or 
recovery of marginal resources on producing or non-producing leases in 
the Gulf of Mexico (GOM) west of 87 degrees, 30 minutes West longitude.
    Section 302 of the DWRRA provides that new production from a lease 
in existence on November 28, 1995, in a water depth of at least 200 
meters, and in the GOM west of 87 degrees, 30 minutes West longitude 
qualifies for royalty suspension in certain situations. To grant a 
royalty suspension, the Secretary must determine that the new 
production or development would not be economic without royalty relief. 
The Secretary must then determine the volume of production on which no 
royalty would be due in order to make the new production from the lease 
economically viable. This determination must be done on a case-by-case 
basis. Production from leases in the same water depth and area issued 
after November 28, 2000, also can qualify for royalty suspension in 
addition to any that may be included in their lease terms.
    In addition, federal policy and statute require us to recover the 
cost of services that confer special benefits to identifiable non-
federal recipients. The Independent Offices Appropriation Act (31 
U.S.C. 9701), OMB Circular A-25, and the Omnibus Appropriations Bill 
(Pub. L. 104-133 110 Stat. 1321, April 26, 1996) authorize MMS to 
collect these fees to reimburse us for the cost to process applications 
or assessments.
    Regulations at 30 CFR part 203 implement these statutes and policy 
and require respondents to pay a fee to request royalty relief. Section 
30 CFR 203.3 states that, ``We will specify the necessary fees for each 
of the types of royalty-relief applications and possible MMS audits in 
a Notice to Lessees. We will periodically update the fees to reflect 
changes in costs as well as provide other information necessary to 
administer royalty relief.''
    MMS uses the information to make decisions on the economic 
viability of leases requesting a suspension or elimination of royalty 
or net profit share. These decisions have enormous monetary impacts to 
both the lessee and the Federal Government. Royalty relief can lead to 
increased production of natural gas and oil, creating profits for 
lessees and royalty and tax revenues for the government that they might 
not otherwise receive. We could not make an informed decision without 
the collection of information required by 30 CFR part 203.
    We will protect information from respondents considered proprietary

[[Page 13421]]

under the Freedom of Information Act (5 U.S.C. 552) and its 
implementing regulations (43 CFR 2) and 30 CFR 203.63(b) and 30 CFR 
250.196. No items of a sensitive nature are collected. Responses are 
mandatory or required to obtain or retain a benefit.
    Frequency: On occasion.
    Estimated Number and Description of Respondents: Approximately 130 
Federal OCS oil and gas lessees.
    Estimated Reporting and Recordkeeping ``Hour'' Burden: The 
currently approved annual reporting burden for this collection is 8,911 
hours. The following chart details the individual components and 
respective hour burden estimates of this ICR. In calculating the 
burdens, we assumed that respondents perform certain requirements in 
the normal course of their activities. We consider these to be usual 
and customary and took that into account in estimating the burden.

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                                             Reporting or recordkeeping requirement 30 CFR part
        Citation 30 CFR 203 and NTLs                                 203                                               Hour burden
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43(a); 46(a)...............................  Notify MMS of intent to begin drilling............  1.
43(b)(1), (2); (d); (e)....................  Notify MMS that production has begun, request       2.
                                              extension, request confirmation of the size of
                                              RSV.
46.........................................  Provide data from well to confirm and attest well   8.
                                              drilled was an unsuccessful certified well and
                                              request supplement.
48(b)......................................  Notify MMS of decision to exercise option to        2.
                                              replace one set of deep gas royalty suspension
                                              terms for another set of such terms.
51; 83; 84.................................  Application--leases that generate earnings that     100.
                                              cannot sustain continued production (end-of-life   Application 1 x $8,000.*
                                              lease).                                            Audit 1 x $12,500.
55.........................................  Renounce relief arrangement (end-of-life) (seldom,  1.
                                              if ever will be used; minimal burden to prepare
                                              letter).
61; 62; 64; 65; 71; 83; 85-89..............  Application--leases in designated areas of GOM      2,000.
                                              deep water acquired in lease sale before 11/28/95  Application 1 x $19,500.
                                              or after 11/28/00 and are producing (deep water
                                              expansion project).
61; 62; 64; 65; 71; 83; 85-89..............  Application--leases in designated areas of deep     2,000.
                                              water GOM, acquired in lease sale before 11/28/95  Application 1 x $34,000.*
                                              or after 11/28/00, that have not produced (pre-    Audit 1 x $37,500.
                                              act or post-2000 deep water leases).
61; 62; 64; 65; 71; 83; 85-89..............  Application--preview assessment (seldom if ever     900.
                                              will be used as applicants generally opt for       Application 1 x $34,000.
                                              binding determination by MMS instead).
74; 75.....................................  Redetermination...................................  500.
                                                                                                 Application 1 x $16,000.*
70; 81; 90; 91.............................  Submit fabricator's confirmation report...........  20.
70; 81; 90; 92.............................  Submit post-production development report.........  50.
70; 79(a)..................................  Request reconsideration of MMS field designation..  400.
77.........................................  Renounce relief arrangement (deep water) (seldom,   1.
                                              if ever will be used; minimal burden to prepare
                                              letter).
79(c)......................................  Request extension of deadline to start              2.
                                              construction.
80.........................................  Application--apart from formal programs for         250.
                                              royalty relief for marginal producing lease        Application 1 x $8,000.**
                                              (expect less than 1 per year).                     Audit 1 x $10,000.
80.........................................  Application--apart from formal programs for         1,000.
                                              royalty relief for marginal expansion project or   Application 1 x $19,500.**
                                              marginal non-producing lease (expect less than 1   Audit 1 x $20,000.
                                              per year).
81; 83-89..................................  Required reports..................................  Burden included with applications.
83.........................................  Application--short form to add or assign pre-Act    40.
                                              lease.                                             Application 1 x $1,000.
91.........................................  Retain supporting cost records for post-production  8.
                                              development/fabrication reports (records retained
                                              as usual/customary business practice; minimal
                                              burden to make available at MMS request.
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* CPA certification expense burden also imposed on applicant.
** These applications currently do not have a set fee since they are done on a case-by-case basis. In the past 11 years, three unique applications have
  been submitted and the respondents were charged approximately $8,000 per application, and $19,500 respectively.


    Note: Applications include numerous items such as: transmittal 
letters, letters of request, modifications to applications, 
reapplications, etc.

    Estimated Reporting and Recordkeeping ``Non-Hour Cost'' Burden: 
There are two non-hour costs associated with this information 
collection. The currently approved non-hour cost burden is $355,000. 
This estimate is based on:
    (a) Application and audit fees. The total annual estimated cost 
burden for these fees is $220,000 (refer to burden chart).
    (b) Cost of reports prepared by independent certified public 
accountants. Under Sec.  203.81, a report prepared by an independent 
certified public accountant (CPA) must accompany the application and 
post-production report (expansion project, short form, and preview 
assessment applications are excluded). The OCS Lands Act applications 
will require this report only once; the DWRRA applications will require 
this report at two stages--with the application and post-production 
development report for successful applicants. We estimate approximately 
three submissions, during the information collection extension, at an 
average cost of $45,000 per report, for a total estimated annual cost 
burden of $135,000.
    Public Disclosure Statement: The PRA (44 U.S.C. 3501, et seq.) 
provides that an agency may not conduct or sponsor a collection of 
information unless it displays a currently valid OMB control number. 
Until OMB approves a collection of information, you are not obligated 
to respond.
    Comments: Before submitting an ICR to OMB, PRA section 
3506(c)(2)(A) requires each agency ``* * * to provide notice * * * and 
otherwise consult

[[Page 13422]]

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.
    Agencies must also estimate the ``non-hour cost'' burdens to 
respondents or recordkeepers resulting from the collection of 
information. Therefore, 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, and record storage 
facilities. You should not include estimates for 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 submission for OMB approval. As a result of your comments, we 
will make any necessary adjustments to the burden in our submission to 
OMB.
    Public Comment Procedures: MMS's practice is to make comments, 
including names and addresses of respondents, available for public 
review. If you wish your name and/or address to be withheld, you must 
state this prominently at the beginning of your comment. MMS will honor 
this request to the extent allowable by law; however, anonymous 
comments will not be considered. All submissions from organizations or 
businesses, and from individuals identifying themselves as 
representatives or officials of organizations or businesses, will be 
made available for public inspection in their entirety.
    MMS Information Collection Clearance Officer: Arlene Bajusz (202) 
208-7744.

    Dated: February 27, 2006.
E.P. Danenberger,
Chief, Office of Offshore Regulatory Programs.
 [FR Doc. E6-3705 Filed 3-14-06; 8:45 am]
BILLING CODE 4310-MR-P