[Federal Register Volume 72, Number 155 (Monday, August 13, 2007)]
[Notices]
[Pages 45264-45268]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-15783]


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

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SUMMARY: To comply with the Paperwork Reduction Act of 1995 (PRA), we 
are inviting comments on a collection of information that we will 
submit to the Office of Management and Budget (OMB) for review and 
approval. We changed the title of this ICR. The previous title of this 
ICR was ``30 CFR 243--Suspensions Pending Appeal and Bonding--Minerals 
Revenue Management (Forms MMS-4435, Administrative Appeal Bond; MMS-
4436, Letter of Credit; and MMS-4437, Assignment of Certificate of 
Deposit).'' The new title of this ICR is ``30 CFR 243--Suspensions 
Pending Appeal and Bonding.'' Forms associated with this collection are 
Forms MMS-4435, Administrative Appeal Bond; MMS-4436, Letter of Credit; 
and MMS-4437, Assignment of Certificate of Deposit.

DATES: Submit written comments on or before October 12, 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-deliver 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 243--Suspensions Pending Appeal and Bonding.
    OMB Control Number: 1010-0122.
    Bureau Form Number: Forms MMS-4435, MMS-4436, and MMS-4437.
    Abstract: The Secretary of the U.S. Department of the Interior is 
responsible for 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. Applicable law citations 
pertaining to mineral leases on Federal and Indian lands 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; and Public 
Law 97-382--Dec. 22, 1982 (Indian Mineral Development Act of 1982). The 
RSFA section 4(l), ``Stay of Payment Obligation Pending Review,'' 
requires MMS to evaluate any person, ordered by the Secretary or a 
delegated state to pay any obligation (other than an assessment) 
subject to RSFA, to determine whether that person is entitled to a stay 
of the order without bond or other surety instrument, pending an 
administrative or judicial proceeding, based on the financial solvency 
of that person. Public laws pertaining to mineral royalties are located 
on our Web site at http://www.mrm.mms.gov/Laws_R_D/PublicLawsAMR.htm.
    Regulations at 30 CFR part 243 govern the suspension of orders or 
decisions pending administrative appeal for Federal leases. These 
regulations require the submission of information demonstrating 
financial solvency by the person who represents the appellant, 
requesting a suspension without the need to provide a surety. For those 
appellants who are not financially solvent or for appeals involving 
Indian leases, MMS requires that a surety instrument be posted to 
secure the financial interest of the public and Indian lessors during 
the entire administrative or judicial appeal process. This information 
collection request covers the burden hours associated with appellants 
submitting financial statements or surety instruments, subject to 
annual audit, required to stay an MMS order.
    Minerals produced from Federal and Indian leases vary greatly in 
the nature of occurrence, production, and processing methods. When a 
company or an individual enters into a lease to explore, develop, 
produce, and dispose of minerals from Federal or Indian lands, that 
company or individual agrees to pay the lessor a share (royalty) of the 
value received from production from the leased lands. The lease creates 
a business relationship between the lessor and the lessee. The lessee 
is required to report various kinds of information to the lessor 
relative to the disposition of the leased minerals. Such information is 
similar to data reported to private and public mineral interest owners 
and is generally available within the records of the lessee or others 
involved in developing, transporting, processing, purchasing, or 
selling such minerals. The information collected includes data 
necessary to ensure that the royalties are paid appropriately.
    Proprietary information submitted to MMS under this collection is 
protected, and no items of a sensitive nature are collected. A response 
is required to obtain the benefit of suspending compliance of an order 
pending appeal.

[[Page 45265]]

Stay of Payment Pending Appeal

    Title 30 CFR 243.1 states that lessees or recipients of MMS 
Minerals Revenue Management (MRM) orders may suspend compliance with an 
order if they appeal in accordance with 30 CFR Part 290, Subpart B--
Appeals of Royalty Management Program and Delegated State Orders (the 
Royalty Management Program is now known as Minerals Revenue 
Management). Pending appeal, MMS suspends the payment requirement if 
the appellant submits a formal agreement of payment in case of default, 
such as a bond or other surety, or demonstrates financial solvency. The 
MMS accepts the following surety types: Form MMS-4435, Administrative 
Appeal Bond; Form MMS-4436, Letter of Credit; Form MMS-4437, Assignment 
of Certificate of Deposit; Self-bonding; and U.S. Treasury Securities.
    When one of the surety types is selected and put in place, 
appellants must maintain the surety until completion of the appeal. If 
the appeal is decided in favor of the appellant, MMS returns the surety 
to the appellant. If the appeal is decided in favor of MMS, then MMS 
will take action to collect full royalty payment or draw down on the 
surety. The MMS draws down on a surety if the appellant fails to comply 
with requirements relating to amount due, timeframe, or surety 
submission or resubmission. Whenever MMS must draw down on a surety, 
the total amount due is defined as unpaid principal plus interest 
accrued to the projected receipt date of the surety payment. Appellants 
may refer to the Surety Instrument Posting Instructions for each of the 
five surety types to submit the respective information. Instructions 
for the five surety types discussed below can be found at http://www.mrm.mms.gov/ReportingServices/PDFDocs/SuretyInst.pdf.

Form MMS-4435, Administrative Appeal Bond

    Appellants may file Form MMS-4435, Administrative Appeal Bond, 
which MMS uses to secure the financial interests of the public and 
Indian lessors during the entire administrative and judicial appeal 
process. Under 30 CFR 243.4, appellants are required to submit their 
contact and surety amount information to obtain the benefit of 
suspension of an obligation to comply with an order. The bond must be 
issued by a qualified surety company that is approved by the Department 
of the Treasury (see Department of the Treasury Circular No. 570, 
revised periodically in the Federal Register). The Associate Director 
for MRM (Associate Director) or the delegated bond-approving officer 
(officer) maintains these bonds in a secure facility. Once the appeal 
has concluded, MMS may release and return the bond to the appellant or 
collect royalty payment upon the bond. If collection is necessary for a 
remaining royalty payment balance, MMS will issue a demand for payment 
to the surety company with a notice to the appellant, including all 
interest accrued on the affected bill.

Form MMS-4436, Letter of Credit

    Appellants may choose to file Form MMS-4436, Letter of Credit, with 
no modifications. Requirements of 30 CFR 243.4 continue to apply. The 
Associate Director or officer maintains the Letter of Credit (LOC) in a 
secure facility. A bank must notarize and issue the LOC for appellants 
in which the bank has a minimum Fitch rating (formerly Bankwatch) of 
``C'' for an LOC of less than $1 million, ``B/C'' for an LOC between $1 
million and $10 million, or ``B'' for an LOC over $10 million. The LOC 
must have a minimum coverage period of 1 year and be automatically 
renewable for up to 5 years.
    The appellant is responsible for verifying that the bank provides a 
current rating to MMS. If the issuing bank's rating falls below the 
minimum acceptable level, a satisfactory replacement surety must be 
submitted within 14 days, or MMS will draw down the existing LOC. If 
the bank issuing the LOC chooses not to renew the existing LOC, it must 
provide MMS with a notice of its decision not to renew 30 days prior to 
expiration of the LOC. Once the appeal has been concluded, MMS may 
release and return the LOC to the appellant or collect royalty payment 
upon the LOC. If collection is necessary for a remaining royalty 
payment balance, MMS will issue a demand for payment, which includes 
all interest assessed on the affected bill, to the bank with a notice 
to the appellant.

Form MMS-4437, Assignment of Certificate of Deposit

    Appellants may choose to secure their debts by requesting to use a 
Certificate of Deposit (CD) from their bank and submitting Form MMS-
4437, Assignment of Certificate of Deposit. Requirements of 30 CFR 
243.4 continue to apply. Appellants must file the request with MMS 
prior to the invoice due date. The MMS will accept a book-entry CD that 
explicitly assigns the CD to the Associate Director. A bank must issue 
the CD in which the bank has a minimum Fitch rating or is confirmed by 
a bank with an acceptable rating. The acceptable ratings for a CD are 
the same as for an LOC. If collection of the CD is necessary for a 
royalty payment balance, MMS will return unused CD funds to the 
appellant after total settlement of the appealed issues, including 
applicable interest charges.

Self-Bonding

    For Federal leases, RSFA section 4(l), as promulgated at 30 CFR 
243.201, provides that no surety instrument is required when a person 
representing the appellant periodically demonstrates, to the 
satisfaction of MMS, that guarantor or appellant is financially solvent 
or otherwise able to pay the obligation. Appellants must submit a 
written request to ``self-bond'' every time a new appeal is filed. To 
evaluate the financial solvency and exemption from requirements of 
appellants to maintain a surety related to an appeal, MMS requires 
appellants to submit a consolidated balance sheet, subject to annual 
audit. In some cases, MMS also requires copies of the most recent tax 
returns--up to 3 years--filed by appellants.
    In addition, appellants must annually submit financial statements, 
subject to annual audit, to support their net worth. The MMS uses the 
consolidated balance sheet or business information supplied to evaluate 
the financial solvency of a lessee, designee, or payor seeking a stay 
of payment obligation pending review. If appellants do not have a 
consolidated balance sheet documenting their net worth, or if they do 
not meet the $300 million net worth requirement, MMS selects a business 
information or credit reporting service to provide information 
concerning an appellant's financial solvency. We charge the appellant a 
$50 fee each time we need to review data from a business information or 
credit reporting service. The fee covers our costs in determining an 
appellant's financial solvency.

U.S. Treasury Securities

    Appellants may choose to secure their debts by requesting to use a 
U.S. Treasury Security (TS). Appellants must file the letter of request 
with MMS prior to the invoice due date. The TS must be a U.S. Treasury 
note or bond with maturity equal to or greater than 1 year. The TS must 
equal 120 percent of the appealed amount plus 1 year of estimated 
interest (necessary to protect MMS against interest rate fluctuations). 
The MMS only accepts a book-entry TS.

[[Page 45266]]

Request to OMB

    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.
    Frequency: Annually and on occasion.
    Estimated Number and Description of Respondents: 140 Federal/Indian 
appellants.
    Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 140 
hours.
    The following chart shows the estimated annual burden hours by CFR 
section and paragraph. We have not included in our estimates certain 
requirements performed in the normal course of business and considered 
usual and customary.

                                   Respondents' Estimated Annual Burden Hours
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                                      Reporting and
      Citation 30 CFR 243             recordkeeping           Hour burden     Average number of   Annual burden
                                       requirement                             annual responses       hours
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                                          Subpart A--General Provisions
----------------------------------------------------------------------------------------------------------------
243.4(a)(1)....................  How do I suspend         1 hour............  75 surety                      75
                                  compliance with an                           instruments
                                  order?                                       (including Forms
                                 (a) If you timely                             MMS-4435, MMS-
                                  appeal an order, and                         4436, and MMS-
                                  if that order or                             4437, or TS).
                                  portion of that order:
                                  (1) Requires you to
                                  make a payment, and
                                  you want to suspend
                                  compliance with that
                                  order, you must post a
                                  bond or other surety
                                  instrument or
                                  demonstrate financial
                                  solvency * * *.
243.6..........................  When must I or another       Burden hours covered under Sec.   243.4(a)(1).
                                  person meet the
                                  bonding or financial
                                  solvency requirements
                                  under this part?
                                 If you must meet the
                                  bonding or financial
                                  solvency requirements
                                  under Sec.
                                  243.4(a)(1), or if
                                  another person is
                                  meeting your bonding
                                  or financial solvency
                                  requirements, then
                                  either you or the
                                  other person must post
                                  a bond or other surety
                                  instrument or
                                  demonstrate financial
                                  solvency within 60
                                  days after you receive
                                  the order or the
                                  Notice of Order.
243.7(a).......................  What must a person do        Burden hours covered under Sec.   243.4(a)(1).
                                  when posting a bond or
                                  other surety
                                  instrument or
                                  demonstrating
                                  financial solvency on
                                  behalf of an
                                  appellant?
                                 If you assume an
                                  appellant's
                                  responsibility to post
                                  a bond or other surety
                                  instrument or
                                  demonstrate financial
                                  solvency * * * (a)
                                  Must notify MMS in
                                  writing * * * that you
                                  are assuming the
                                  appellant's
                                  responsibility * * *.
243.8(a)(2) and (b)(2).........  When will MMS suspend        Burden hours covered under Sec.   243.4(a)(1).
                                  my obligation to
                                  comply with an order?
                                 (a) Federal leases. * *
                                  * (2) If the amount
                                  under appeal is
                                  $10,000 or more, MMS
                                  will suspend your
                                  obligation to comply
                                  with that order if
                                  you:.
                                 (i) Submit an MMS-
                                  specified surety
                                  instrument under
                                  subpart B of this part
                                  within a time period
                                  MMS prescribes; or.
                                 (ii) Demonstrate
                                  financial solvency
                                  under subpart C.
                                 (b) Indian leases. * *
                                  * (2) If the amount
                                  under appeal is $1,000
                                  or more, MMS will
                                  suspend your
                                  obligation to comply
                                  with that order if you
                                  submit an MMS-
                                  specified surety
                                  instrument under
                                  subpart B of this part
                                  within a time period
                                  MMS prescribes.
----------------------------------------------------------------------------------------------------------------
                                         Subpart B--Bonding Requirements
----------------------------------------------------------------------------------------------------------------
243.101(b).....................  How will MMS determine       Burden hours covered under Sec.   243.4(a)(1).
                                  the amount of my bond
                                  or other surety
                                  instrument?
                                 * * * (b) If your
                                  appeal is not decided
                                  within 1 year from the
                                  filing date, you must
                                  increase the surety
                                  amount to cover
                                  additional estimated
                                  interest for another 1-
                                  year period. You must
                                  continue to do this
                                  annually * * *.
----------------------------------------------------------------------------------------------------------------

[[Page 45267]]

 
                                   Subpart C--Financial Solvency Requirements
                                                         -------------------------------------------------------
243.200(a) and (b).............  How do I demonstrate     1 hour............  65 self-bonding                65
                                  financial solvency?                          submissions-
                                 (a) To demonstrate                            demonstration of
                                  financial solvency                           financial
                                  under this part, you                         solvency.
                                  must submit an audited
                                  consolidated balance
                                  sheet, and, if
                                  requested by the MMS
                                  bond-approving
                                  officer, up to 3 years
                                  of tax returns to the
                                  MMS, *. * *.
                                 (b) You must submit an
                                  audited consolidated
                                  balance sheet
                                  annually, and, if
                                  requested, additional
                                  annual tax returns on
                                  the date MMS first
                                  determined that you
                                  demonstrated financial
                                  solvency as long as
                                  you have active
                                  appeals, or whenever
                                  MMS requests. * * *.
243.201 (c)(1), (c)(2)(i), and   How will MMS determine     Burden hours covered under Sec.  Sec.   243.4(a)(1)
 (c)(2)(ii) and 243.201(d)(2).    if I am financially                     and 243.200(a) and (b).
                                  solvent?
                                 * * * (c) If your net
                                  worth, minus the
                                  amount we would
                                  require as surety
                                  under subpart B for
                                  all orders you have
                                  appealed is less than
                                  $300 million, you must
                                  submit * * *:.
                                 (1) A written request
                                  asking us to consult a
                                  business-information,
                                  or credit-reporting
                                  service or program to
                                  determine your
                                  financial solvency;
                                  and.
                                 (2) A nonrefundable $50
                                  processing fee:.
                                 (i) You must pay the
                                  processing fee * * *.
                                 (ii) You must submit
                                  the fee with your
                                  request * * * and then
                                  annually on the date
                                  we first determined
                                  that you demonstrated
                                  financial solvency, as
                                  long as you are not
                                  able to demonstrate
                                  financial solvency * *
                                  * and you have active
                                  appeals..
                                 (d) * * * (2) For us to
                                  consider you
                                  financially solvent,
                                  the business-
                                  information or credit-
                                  reporting service or
                                  program must
                                  demonstrate your
                                  degree of risk as low
                                  to moderate: * * *.
243.202(c).....................  When will MMS monitor      Burden hours covered under Sec.  Sec.   243.4(a)(1)
                                  my financial solvency?                  and 243.200 (a) and (b).
                                 * * * (c) If our bond-
                                  approving officer
                                  determines that you
                                  are no longer
                                  financially solvent,
                                  you must post a bond
                                  or other MMS-specified
                                  surety instrument
                                  under subpart B..
                                --------------------------------------------------------------------------------
    Total Burden...............  .......................  ..................  140..............             140
----------------------------------------------------------------------------------------------------------------

    Estimated Annual Reporting and Recordkeeping ``Non-Hour'' Cost 
Burden: There are no additional recordkeeping costs associated with 
this information collection. However, MMS estimates 15 appellants will 
pay MMS a $50 fee to obtain credit data from a business information or 
credit reporting service as a ``non-hour'' cost burden over the next 3 
years for a total of $250 per year (5 appellants per year x $50 = 
$250).
    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 
requirements not associated with the information collection; (iii) for 
reasons

[[Page 45268]]

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. Before including your address, phone number, e-mail address, 
or other personal identifying information in your comment, you should 
be advised 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 from public review 
your personal identifying information, 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. E7-15783 Filed 8-10-07; 8:45 am]
BILLING CODE 4310-MR-P