[Federal Register Volume 72, Number 153 (Thursday, August 9, 2007)]
[Notices]
[Pages 44853-44856]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-15590]


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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 1010-0107).

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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 new title of this information collection request (ICR) is 
``30 CFR Part 218, Collection of Monies Due the Federal Government.'' 
The form associated with this collection is Form MMS-4425, Designation 
Form for Royalty Payment Responsibility. The previous title of this ICR 
was ``30 CFR Part 218, Subpart A--General Provisions, 218.42 Cross-
lease netting in calculation of late-payment interest; Subpart B--Oil 
and Gas, General, 218.52 How does a lessee designate a Designee? (Form 
MMS-4425, Designation Form for Royalty Payment Responsibility) and 
218.53 Recoupment of overpayments on Indian mineral leases; and Subpart 
E--Solid Minerals--General, 218.203 Recoupment of overpayments on 
Indian mineral leases.''
    We revised this ICR in order to enable program-wide review of all 
information collections for solid minerals and geothermal resources. We 
removed 218.203, which relates to solid minerals, from this ICR and 
included 218.203 in the solid minerals ICR 1010-0120 (expires October 
31, 2007).

DATES: Submit written comments on or before October 9, 2007.

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, 
West 6th Ave. and Kipling Blvd., 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. 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 218, Collection of Monies Due the Federal 
Government.
    OMB Control Number: 1010-0107.
    Bureau Form Number: Form MMS-4425.
    Abstract: The Secretary of the U.S. Department of the Interior is 
responsible for collecting royalties from lessees who produce minerals 
from leased Federal and Indian lands. The Secretary is required by 
various laws to manage mineral resources production on Federal and 
Indian lands, collect the royalties due, and distribute the funds in 
accordance with those laws. The Secretary also has a trust 
responsibility to manage Indian lands and seek advice and information 
from Indian beneficiaries. The MMS performs the royalty management 
functions and assists the Secretary in carrying out the Department's 
trust responsibility for Indian lands.
    Public laws pertaining to mineral royalties are on our Web site at 
http://www.mrm.mms.gov/Laws_R_D/PublicLawsAMR.htm. Applicable 
citations of the laws pertaining to mineral leases include the 
following:
    1. Public Law 97-451--Jan. 12, 1983 (Federal Oil and Gas Royalty 
Management Act of 1982 [FOGRMA]);

[[Page 44854]]

    2. 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. Indian Mineral Development Act of 1982 (25 U.S.C. 2101 et seq.).
    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.

Designation of Designee

    The Federal Oil and Gas Royalty Simplification and Fairness Act of 
1996 (RSFA), Public Law 104-185, as corrected by Public Law 104-200, 
established that lessees (owners, primarily, of operating rights, or 
secondarily, lease record title) are responsible for making royalty and 
related payments on Federal oil and gas leases. These RSFA requirements 
are codified at 218.52. It is common, however, for a payor rather than 
a lessee to make these payments. When a payor makes payments on behalf 
of a lessee, RSFA section 6(g) requires that the lessee designate the 
payor as its designee and notify MMS of this arrangement in writing. 
The MMS designed Form MMS-4425, Designation Form for Royalty Payment 
Responsibility, to request all the information necessary for lessees to 
comply with these RSFA requirements when they choose to designate an 
agent to pay for them.

Cross-Lease Netting in Calculation of Late-Payment Interest

    Regulations at 218.54 require MMS to assess interest on unpaid or 
underpaid amounts. The MMS distributes these interest revenues to 
states, Indians, and the U.S. Treasury, based on financial lease 
distribution information. Current regulations at 218.42 provide that an 
overpayment on a lease or leases may be offset against an underpayment 
on a different lease or leases to determine the net payment subject to 
interest, when certain conditions are met. This is called cross-lease 
netting. However, RSFA sections 6(a), (b), and (c) require MMS to pay 
interest on lessees' Federal oil and gas overpayments made on or after 
February 13, 1997 (6 months after the August 13, 1996 enactment of 
RSFA). The MMS implemented this RSFA provision in 1997 and began 
calculating interest on both underpayments and overpayments for Federal 
oil and gas leases, making the cross-lease netting provisions at 218.42 
no longer applicable for these leases. The MMS is developing 
regulations [MRM1] to amend 218.42 to limit its 
applicability to payments made under Indian tribal leases and Federal 
leases for minerals other than oil and gas. The MMS estimates that in 
about seven cases per year, lessees must comply with the provisions of 
218.42(b) and (c) for Indian tribal leases or Federal leases other than 
oil and gas, demonstrating that cross-lease netting is correct by 
submitting production reports, pipeline allocation reports, or other 
similar documentary evidence. This information is necessary for MMS to 
determine the correct amount of interest owed by the lessee and to 
ensure proper value is collected.

Tribal Permission for Recoupment on Indian Leases

    In order to report cross-lease netting on Indian leases, lessees 
must also comply with regulations at 218.53(b), allowing only lessees 
with written permission from the tribe to recoup overpayments on one 
lease against a different lease for which the tribe is the lessor. The 
payor must furnish MMS with a copy of the tribe's written permission. 
Generally, a payor may recoup an overpayment against the current 
month's royalties or other revenues owed on the same tribal lease. For 
any month, a payor may not recoup more than 50 percent of the royalties 
or other revenues owed in that month, under an individual allotted 
lease, or more than 100 percent of the royalties or other revenues owed 
in that month, under a tribal lease. Lessees use Form MMS-2014, Report 
of Sales and Royalty Remittance (burden hours covered under ICR 1010-
0140, which expires November 30, 2009), for oil and gas lease 
recoupments. The MMS requires tribal permission to ensure 
tribes[MRM2] receive correct revenues from production on 
their leases.
    The MMS is requesting OMB's approval to continue to collect this 
information. Not collecting this information would limit the 
Secretary's ability to discharge his/her duties and may also result in 
loss of royalty payments. Proprietary information submitted is 
protected, and there are no questions of a sensitive nature included in 
this information collection.
    Frequency: On occasion.
    Estimated Number and Description of Respondents: 1,612 Federal and 
Indian lessees.
    Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 1,219 
hours.
    We have not included in our estimates certain requirements 
performed in the normal course of business and considered usual and 
customary. The following chart shows the estimated burden hours by CFR 
section and paragraph:

[[Page 44855]]



                                   Respondents' Estimated Annual Burden Hours
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                                      Reporting and
    Citation 30 CFR part 218          recordkeeping         Hour burden     Average number of    Annual burden
                                       requirement                          annual  responses        hours
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           Subpart A--General Provisions--Cross-lease netting in calculation of late-payment interest
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218.42(b) and (c)..............  Cross-lease netting in                  2                  7                 14
                                  calculation of late-
                                  payment interest. (b)
                                  Royalties attributed
                                  to production from a
                                  lease or leases which
                                  should have been
                                  attributed to
                                  production from a
                                  different lease or
                                  leases may be offset
                                  * * * if * * * the
                                  payor submits
                                  production reports,
                                  pipeline allocation
                                  reports, or other
                                  similar documentary
                                  evidence pertaining
                                  to the specific
                                  production involved
                                  which verifies the
                                  correct production
                                  information * * *.
                                 (c) If MMS assesses
                                  late-payment interest
                                  and the payor asserts
                                  that some or all of
                                  the interest is not
                                  owed * * * the burden
                                  is on the payor to
                                  demonstrate that the
                                  exception applies * *
                                  *..
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                    Subpart B--Oil and Gas, General--How does a lessee designate a Designee?
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218.52(a), (c), and (d)........  How does a lessee                    0.75              1,600              1,200
                                  designate a Designee?
                                  (a) If you are a
                                  lessee under 30
                                  U.S.C. 1701(7), and
                                  you want to designate
                                  a person to make all
                                  or part of the
                                  payments due under a
                                  lease on your behalf
                                  * * * you must notify
                                  MMS * * * in writing
                                  of such designation *
                                  * *.
                                 (c) If you want to
                                  terminate a
                                  designation * * *.
                                  you must provide [the
                                  following] to MMS in
                                  writing * * *.
                                 (d) MMS may require
                                  you to provide notice
                                  when there is a
                                  change in the
                                  percentage of your
                                  record title or
                                  operating rights
                                  ownership..
                                 The MMS currently uses
                                  Form MMS-4425,
                                  Designation Form for
                                  Royalty Payment
                                  Responsibility, to
                                  collect this
                                  information..
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              Subpart B--Oil and Gas, General--Recoupment of overpayments on Indian mineral leases
----------------------------------------------------------------------------------------------------------------
218.53(b)......................  Recoupment of                           1                  5                  5
                                  overpayments on
                                  Indian mineral
                                  leases. (b) With
                                  written permission
                                  authorized by tribal
                                  statute or
                                  resolution, a payor
                                  may recoup an
                                  overpayment against
                                  royalties or other
                                  revenues owed * * *
                                  under other leases *
                                  * *. A copy of the
                                  tribe's written
                                  permission must be
                                  furnished to MMS * *
                                  *.
                                --------------------------------------------------------------------------------
    Total burden...............  ......................  .................              1,612              1,219
----------------------------------------------------------------------------------------------------------------

    Estimated Annual Reporting and Recordkeeping ``Non-hour Cost'' 
Burden: We have identified no ``non-hour cost'' burden associated with 
the collection of information.
    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. 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

[[Page 44856]]

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/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. Before including your address, phone number, e-mail address, 
or other personal identifying information in your comment, you should 
be aware that your entire comment--including your personal identifying 
information--may be made publicly available at any time. While you can 
ask us in your comment to withhold your personal identifying 
information from public view, we cannot guarantee that we will be able 
to do so.
    MMS Information Collection Clearance Officer: Arlene Bajusz, (202) 
208-7744.

    Dated: August 6, 2007.
Lucy Querques Denett,
Associate Director for Minerals Revenue Management.
[FR Doc. E7-15590 Filed 8-8-07; 8:45 am]
BILLING CODE 4310-MR-P