[Federal Register Volume 71, Number 94 (Tuesday, May 16, 2006)]
[Notices]
[Pages 28382-28386]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-7440]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service


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

AGENCY: Minerals Management Service (MMS), Interior.

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

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SUMMARY: To comply with the Paperwork Reduction Act of 1995 (PRA), we 
are notifying the public that we have submitted to OMB an information 
collection request (ICR) to renew approval of the paperwork 
requirements in the regulations under 30 CFR part 204--Alternatives for 
Marginal Properties, subpart C--Accounting and Auditing Relief. This 
notice also provides the public a second opportunity to comment on the 
paperwork burden of these regulatory requirements. This ICR is titled 
``30 CFR part 204--Alternatives for Marginal Properties, Subpart C--
Accounting and Auditing Relief.'' This ICR covers the regulatory 
language under 30 CFR part 204, as published in the Accounting and 
Auditing Relief for Marginal Properties final rule on September 13, 
2004 (69 FR 55076). This citation explains how lessees and their 
designees can obtain accounting and auditing relief for production from 
Federal oil and gas leases and units and communitization agreements 
that qualify as marginal properties.

DATES: Submit written comments on or before June 15, 2006.

ADDRESSES: Submit written comments by either FAX (202) 395-6566 or e-
mail ([email protected]) directly to the Office of Information 
and Regulatory Affairs, OMB, Attention: Desk Officer for the Department 
of the Interior (OMB Control Number 1010-0155). Mail your comments to 
Sharron L. Gebhardt, Lead Regulatory Specialist, Minerals Management 
Service, Minerals Revenue Management, P.O. Box 25165, MS 302B2, Denver, 
Colorado 80225. If you use an overnight courier service or wish to 
hand-carry your comments, our 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, e-mail [email protected]. You may 
also contact Sharron Gebhardt to obtain, at no cost, a copy of the 
regulations that require the subject collection of information.

SUPPLEMENTARY INFORMATION:
    Title: 30 CFR part 204--Alternatives for Marginal Properties, 
Subpart C--Accounting and Auditing Relief.
    OMB Control Number: 1010-0155.
    Bureau Form Number: None.
    Abstract: The Secretary of the U.S. Department of the Interior is 
responsible for collecting royalties from lessees who produce minerals 
from leased Federal lands. The Secretary is required by various laws to 
manage mineral resources production on Federal lands, collect the 
royalties due, and distribute the funds in accordance with those laws. 
The product valuation determination process is essential to assure that 
royalty payments are based on the proper value of the minerals being 
removed. The MMS performs the royalty management functions for the 
Secretary.
    Minerals produced from Federal leases vary greatly in the nature of 
occurrence, markets served, and production and processing methods. 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

[[Page 28383]]

share (royalty) of the value received from production from the leased 
lands. The lease creates a business relationship between the lessor and 
the lessee. The lessee is required to report various kinds of 
information to the lessor relative to the disposition of the leased 
minerals. Such information is similar to data reported to private and 
public mineral interest owners and is generally available within the 
records of the lessee or others involved in developing, transporting, 
processing, purchasing, or selling of such minerals. The information 
collected includes data necessary to ensure that the royalties are 
accurately valued and appropriately paid.
    Applicable citations of the laws pertaining to the accounting and 
auditing relief include:
    (1) 30 CFR part 204;
    (2) Sections 6 and 7 of Public Law 104-185--Aug. 13, 1996 (Federal 
Oil and Gas Royalty Simplification and Fairness Act of 1996 [RSFA]), as 
corrected by Public Law 104-200-Sept. 22, 1996; and
    (3) Section 111 of Public Law 97-451--Jan. 12, 1983 (Federal Oil 
and Gas Royalty Management Act of 1982 [FOGRMA]).
    Section 7 of RSFA provides for MMS and states concerned to 
determine, on a case-by-case basis, the amount of marginal production 
that may be subject to either prepayment of royalty or accounting and 
auditing relief. The MMS amended its regulations in 2004 to provide 
guidance to lessees and designees seeking accounting and auditing 
relief for Federal marginal properties. For purposes of section 7, RSFA 
does not define marginal property but does say that any granted 
alternative is to promote production, reduce administrative costs, and 
increase net receipts to the Federal Government and the states. Under 
section 7, RSFA also provides that the state concerned with a marginal 
property must approve any use of an alternative.
    There are two types of relief: cumulative royalty reports and 
payments relief, and other relief. Under 30 CFR 204.202, MMS requires 
notification from lessees or designees who request to take the 
cumulative royalty reporting and payment relief option. Under 30 CFR 
204.203, MMS requires a relief request from lessees or designees who 
want to obtain any other type of accounting and auditing relief. This 
information collection is voluntary; only those lessees or designees 
who choose to obtain relief must supply this information.
    A state may decide in advance that it will or will not allow one or 
both of the relief options for each particular year. To help states 
decide whether to allow one or both of the relief options, MMS will 
send states a Report of Marginal Properties by October 1 preceding the 
calendar year. Each state must notify MMS of its intent to allow or not 
allow one or both of the relief options by November 1 preceding the 
same calendar year.
    The MMS will determine, depending on the type of accounting and 
auditing relief being sought by the lessee or designee, that a lessee 
or designee must file either a notification or a request for relief 
with MMS to obtain the applicable form of relief provided for under 
RSFA section 7. This will allow the lessee or designee to specify the 
type of relief requested under RSFA section 7 on a case-by-case basis.
    For the other relief option, MMS and the state concerned will use 
the information supplied by the lessee or designee in their relief 
request to (1) identify the person making the request; (2) identify the 
marginal property for which relief is being requested; (3) determine 
the relief being sought by the lessee or designee; (4) determine if the 
relief should be granted or denied; and (5) monitor the lessee's 
continuing eligibility of the relief being taken. After consulting with 
the state concerned, MMS will either approve, deny, or modify requests 
in writing. Under RSFA section 7, both MMS and a state concerned with a 
marginal property must approve any accounting and auditing relief 
granted for a marginal property. Therefore, MMS and the state concerned 
must determine that the relief is in the best interests of the Federal 
Government and the state concerned.
    Notification is required of lessees or designees who wish to take 
the cumulative reporting and payment relief option. A relief request is 
required of lessees or designees who wish to obtain any other type of 
individual accounting and auditing relief. This information collection 
under this rule is voluntary; only those lessees or designees who 
choose to obtain or retain the benefit of accounting and auditing 
relief must supply this information.
    A response is required to obtain the benefit of accounting and 
auditing relief.
    Proprietary information submitted to MMS under this collection is 
protected, and no items of a sensitive nature are collected.
    Frequency: For Federal lessees/designees, one time, and then again 
only if changes occur; for states, annually.
    Estimated Number and Description of Respondents: 1,010 Federal 
lessees/designees and 15 states.
    Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 406 
hours.
    With participation in the relief program offered in 30 CFR part 
204, MMS estimates an annual reporting burden hour saving of 694 hours 
for each subsequent year. This annual reporting burden hour saving is 
reflected in ICR 1010-0140 (expires 10/31/2006). We estimate 
approximately 138 total responses--134 responses from 1,010 Federal 
lessees/designees; and 4 responses from 15 states. Each state requires 
an annual in-depth analysis informing MMS of their decision to 
participate or not participate in accounting and auditing relief. We 
have not included in our estimates certain requirements performed in 
the normal course of business and considered usual and customary. The 
following chart shows the estimated burden hours by CFR section and 
paragraph:

[[Page 28384]]



                                   Respondent's Estimated Annual Burden Hours
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                                     Reporting and
      Citation 30 CFR 204            recordkeeping         Hour burden     Average number of     Annual burden
                                      requirement                          annual  responses         hours
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            PART 204--ALTERNATIVES FOR MARGINAL PROPERTIES Subpart C--Accounting and Auditing Relief
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204.202(b)(1).................  Sec.   204.202 What is                  2                100                 200
                                 the cumulative
                                 royalty reports and
                                 payments relief
                                 option?.
                                (b) To use the
                                 cumulative royalty
                                 reports and payments
                                 relief option, you
                                 must do all of the
                                 following.
                                (1) Notify MMS in
                                 writing by January 31
                                 of the calendar year
                                 for which you begin
                                 taking your relief. *
                                 * *.
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204.202(b)(2).................  Sec.   204.202 What is      Burden covered under OMB Control Number 1010-0140
                                 the cumulative                           (expires 10/31/2006).
                                 royalty reports and
                                 payments relief
                                 option?
                                (2) Submit your
                                 royalty report and
                                 payment * * * by the
                                 end of February of
                                 the year following
                                 the calendar year for
                                 which you reported
                                 annually, * * * If
                                 you have an estimated
                                 payment on file, you
                                 must submit your
                                 royalty report and
                                 payment by the end of
                                 March of the year
                                 following the
                                 calendar year for
                                 which you reported
                                 annually;.
                                (3) Use the sales
                                 month prior to the
                                 month that you submit
                                 your annual report
                                 and payment * * * for
                                 the entire previous
                                 calendar year's
                                 production for which
                                 you are paying
                                 annually.* * *.
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204.202(b)(4), (b)(5), (c),     Sec.   204.202 What is      Burden covered under OMB Control Number 1010-0140
 (d)(1), (d)(2), (e)(1), and     the cumulative                           (expires 10/31/2006).
 (e)(2).                         royalty reports and
                                 payments relief
                                 option?
                                (b) To use the
                                 cumulative royalty
                                 reports and payments
                                 relief option, you
                                 must * * *.
                                (4) Report one line of
                                 cumulative royalty
                                 information on Form
                                 MMS-2014 for the
                                 calendar year, * * *
                                 and.
                                (5) Report allowances
                                 on Form MMS-2014 on
                                 the same annual basis
                                 as the royalties for
                                 your marginal
                                 property production..
                                (c) If you do not pay
                                 your royalty by the
                                 date due in paragraph
                                 (b) of this section,
                                 you will owe late
                                 payment interest * *
                                 * from the date your
                                 payment was due under
                                 this section until
                                 the date MMS receives
                                 it. * * *.
                                (e) If you dispose of
                                 your ownership
                                 interest in a
                                 marginal property for
                                 which you have taken
                                 relief * * * you
                                 must:.
                                (1) Report and pay
                                 royalties for the
                                 portion of the
                                 calendar year for
                                 which you had an
                                 ownership interest;
                                 and.
                                (2) Make the report
                                 and payment by the
                                 end of the month
                                 after you dispose of
                                 the ownership
                                 interest in the
                                 marginal property. If
                                 you do not report and
                                 pay timely, you will
                                 owe interest * * *
                                 from the date the
                                 payment was due * * *.
----------------------------------------------------------------------------------------------------------------
204.203(b)....................  Sec.   204.203 What is                  4                 10                  40
                                 the other relief
                                 option?.
                                (b) You must request
                                 approval from MMS * *
                                 * before taking
                                 relief under this
                                 option.
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204.205(a) and (b)............  Sec.   204.205 How do         Hour burden covered under Sec.   204.203(b).
                                 I obtain accounting
                                 and auditing relief?
                                (a) To take cumulative
                                 reports and payments
                                 relief under Sec.
                                 204.202, you must
                                 notify MMS in writing
                                 by January 31 of the
                                 calendar year for
                                 which you begin
                                 taking your relief..
                                (b) To obtain other
                                 relief under Sec.
                                 204.203, you must
                                 file a written
                                 request for relief
                                 with MMS.
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[[Page 28385]]

 
204.206(a)(3)(i) and (b)(1)...  Sec.   204.206 What           Hour burden covered under Sec.   204.203(b).
                                 will MMS do when it
                                 receives my request
                                 for other relief?
                                When MMS receives your
                                 request for other
                                 relief under Sec.
                                 204.205(b), it will
                                 notify you in writing
                                 as follows:.
                                (a) If your request
                                 for relief is
                                 complete, MMS may
                                 either approve, deny,
                                 or modify your
                                 request in writing
                                 after consultation
                                 with any State * * *.
                                (3) If MMS modifies
                                 your relief request,
                                 MMS will notify you
                                 of the modifications..
                                (i) You have 60 days
                                 from your receipt of
                                 MMS's notice to
                                 either accept or
                                 reject any
                                 modification(s) in
                                 writing..
                                (b) If your request
                                 for relief is not
                                 complete, MMS will
                                 notify you in writing
                                 * * *.
                                (1) You must submit
                                 the missing
                                 information within 60
                                 days of your receipt
                                 of MMS's notice * * *.
----------------------------------------------------------------------------------------------------------------
204.208 (c)(1) and (d)(1).....  Sec.   204.208 May a                   40                  4                 160
                                 State decide that it
                                 will or will not
                                 allow one or both of
                                 the relief options
                                 under this subpart?
                                (c) If a State decides
                                 * * * that it will or
                                 will not allow one or
                                 both of the relief
                                 options * * * within
                                 30 days * * * the
                                 State must:.
                                (1) Notify the
                                 Associate Director
                                 for Minerals Revenue
                                 Management, MMS, in
                                 writing, of its
                                 intent to allow or
                                 not allow one or both
                                 of the relief options
                                 * * *.
                                (d) If a State decides
                                 in advance * * * that
                                 it will not allow one
                                 or both of the relief
                                 options * * * the
                                 State must:.
                                (1) Notify the
                                 Associate Director
                                 for Minerals Revenue
                                 Management, MMS, in
                                 writing, of its
                                 intent to allow one
                                 or both of the relief
                                 options * * *.
----------------------------------------------------------------------------------------------------------------
204.209(b)....................  Sec.   204.209 What if                .25                 24                   6
                                 a property ceases to
                                 qualify for relief
                                 obtained under this
                                 subpart?
                                (b) If a property is
                                 no longer eligible
                                 for relief * * * the
                                 relief for the
                                 property terminates
                                 as of December 31 of
                                 that calendar year.
                                 You must notify MMS
                                 in writing by
                                 December 31 that the
                                 relief for the
                                 property has
                                 terminated.
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204.210(c) and (d)............  Sec.   204.210 What if      Burden covered under OMB Control Number 1010-0140
                                 a property is                            (expires 10/31/2006).
                                 approved as part of a
                                 nonqualifying
                                 agreement?
                                (c) * * * the volumes
                                 on which you report
                                 and pay royalty * * *
                                 must be amended to
                                 reflect all volumes
                                 produced on or
                                 allocated to your
                                 lease under the
                                 nonqualifying
                                 agreement as modified
                                 by BLM * * * Report
                                 and pay royalties for
                                 your production using
                                 the procedures in
                                 Sec.   204.202(b)..
                                (d) If you owe
                                 additional royalties
                                 based on the
                                 retroactive agreement
                                 approval and do not
                                 pay your royalty by
                                 the date due in Sec.
                                  204.202(b), you will
                                 owe late payment
                                 interest determined
                                 under 30 CFR 218.54
                                 from the date your
                                 payment was due under
                                 Sec.   204.202(b)(2)
                                 until the date MMS
                                 receives it..
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[[Page 28386]]

 
204.214(b)(1) and (b)(2)......  Sec.   204.214(b) Is        Burden covered under OMB Control Number 1010-0140
                                 minimum royalty due                      (expires 10/31/2006).
                                 on a property for
                                 which I took relief?
                                (b) If you pay minimum
                                 royalty on production
                                 from a marginal
                                 property during a
                                 calendar year for
                                 which you are taking
                                 cumulative royalty
                                 reports and payment
                                 relief, and:.
                                (1) The annual payment
                                 you owe under this
                                 subpart is greater
                                 than the minimum
                                 royalty you paid, you
                                 must pay the
                                 difference between
                                 the minimum royalty
                                 you paid and your
                                 annual payment due
                                 under this subpart;
                                 or.
                                (2) The annual payment
                                 you owe under this
                                 subpart is less than
                                 the minimum royalty
                                 you paid, you are not
                                 entitled to a credit
                                 because you must pay
                                 at least the minimum
                                 royalty amount on
                                 your lease each year..
                               ---------------------------------------------------------------------------------
    Total.....................  ......................  .................                138                 406
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    Estimated Annual Reporting and Recordkeeping ``Non-hour'' Cost 
Burden: We have identified no ``non-hour'' cost burdens.
    Public Disclosure Statement: The PRA (44 U.S.C. 3501 et seq.) 
provides that an agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless it displays 
a currently valid OMB control number.
    Comments: Section 3506(c)(2)(A) of the PRA requires each agency ``* 
* * to provide notice * * * and otherwise consult with members of the 
public and affected agencies concerning each proposed collection of 
information * * *.'' Agencies must specifically solicit comments to: 
(a) Evaluate whether the proposed collection of information is 
necessary for the agency to perform its duties, including whether the 
information is useful; (b) evaluate the accuracy of the agency's 
estimate of the burden of the proposed collection of information; (c) 
enhance the quality, usefulness, and clarity of the information to be 
collected; and (d) minimize the burden on the respondents, including 
the use of automated collection techniques or other forms of 
information technology.
    To comply with the public consultation process, we published a 
notice in the Federal Register on June 3, 2005 (70 FR 32647), 
announcing that we would submit this ICR to OMB for approval. The 
notice provided the required 60-day comment period. We received no 
comments in response to the notice.
    If you wish to comment in response to this notice, you may send 
your comments to the offices listed under the ADDRESSES section of this 
notice. The OMB has up to 60 days to approve or disapprove the 
information collection but may respond after 30 days. Therefore, to 
ensure maximum consideration, OMB should receive public comments by 
June 15, 2006.
    Public Comment Policy: We will post all comments in response to 
this notice on our Web site at http://www.mrm.mms.gov/Laws_R_D/InfoColl/InfoColCom.htm. We will also make copies of the comments 
available for public review, including names and addresses of 
respondents, during regular business hours at our offices in Lakewood, 
Colorado. Upon request, we will withhold an individual respondent's 
home address from the public record, as allowable by law. There also 
may be circumstances in which we would withhold a respondent's 
identity, as allowable by law. If you request that we withhold your 
name and/or address, state your request prominently at the beginning of 
your comment. However, we will not consider anonymous comments. We will 
make all submissions from organizations or businesses, and from 
individuals identifying themselves as representatives or officials of 
organizations or businesses, available for public inspection in their 
entirety.
    MMS Information Collection Clearance Officer: Arlene Bajusz (202) 
208-7744.

    Dated: December 28, 2005.
Cathy J. Hamilton,
Acting Associate Director for Minerals Revenue Management.

    Editorial Note: This document was received at the Office of the 
Federal Register on May 11, 2006.
[FR Doc. E6-7440 Filed 5-15-06; 8:45 am]
BILLING CODE 4310-MR-P