[Federal Register Volume 73, Number 127 (Tuesday, July 1, 2008)]
[Notices]
[Pages 37482-37485]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-14894]



[[Page 37482]]

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DEPARTMENT OF THE INTERIOR

Minerals Management Service

[Docket No. MMS-2008-MRM-0008]


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 1010-0122).

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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 the Office of 
Management and Budget (OMB) an information collection request (ICR) to 
renew approval of the paperwork requirements in the regulations under 
30 CFR part 243. This notice also provides the public a second 
opportunity to comment on the paperwork burden of these regulatory 
requirements. We changed the title of this ICR to clarify the 
regulatory language we are covering under 30 CFR part 243. 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 Part 
243--Suspensions Pending Appeal and Bonding--Minerals Revenue 
Management.''

DATES: Submit written comments on or before July 31, 2008.

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 1010-0122).
    Please submit copies of your comments to MMS by the following 
methods:
     Electronically go to http://www.regulations.gov. In the 
``Comment or Submission'' column, enter ``MMS-2008-MRM-0008'' to view 
supporting and related materials for this ICR. Click on ``Send a 
comment or submission'' link to submit public comments. Information on 
using Regulations.gov, including instructions for accessing documents, 
submitting comments, and viewing the docket after the close of the 
comment period, is available through the site's ``User Tips'' link. All 
comments submitted will be posted to the docket.
     Mail comments to Armand Southall, Regulatory Specialist, 
Minerals Management Service, Minerals Revenue Management, P.O. Box 
25165, MS 302B2, Denver, Colorado 80225. Please reference ICR 1010-0122 
in your comments.
     Hand-carry comments or use an overnight courier service. 
Our courier address is Building 85, Room A-614, Denver Federal Center, 
West 6th Ave. and Kipling Blvd., Denver, Colorado 80225. Please 
reference ICR 1010-0122 in your comments.

FOR FURTHER INFORMATION CONTACT: Armand Southall, telephone (303) 231-
3221, or e-mail [email protected]. You may also contact Armand 
Southall to obtain copies, at no cost, of (1) the ICR, (2) any 
associated forms, and (3) the regulations that require the subject 
collection of information.

SUPPLEMENTARY INFORMATION:
    Title: 30 CFR Part 243-Suspensions Pending Appeal and Bonding--
Minerals Revenue Management.
    OMB Control Number: 1010-0122.
    Bureau Form Number: Forms MMS-4435, MMS-4436, and MMS-4437.
    Abstract: The Secretary of the United States Department of the 
Interior (Secretary) is responsible for matters relevant to mineral 
resource development on Federal and Indian lands and the Outer 
Continental Shelf (OCS). The Secretary, under the Mineral Leasing Act 
of 1920 (30 U.S.C. 1923), Indian Mineral Development Act of 1982 (Pub. 
L. 97-382--Dec. 22, 1982), and the Outer Continental Shelf Lands Act 
(43 U.S.C. 1353), is responsible for managing the production of 
minerals from Federal and Indian lands and the OCS, collecting 
royalties and other mineral revenues from lessees who produce minerals, 
and distributing the funds collected in accordance with applicable 
laws. The Secretary also has a trust responsibility to manage Indian 
lands and seek advice and information from Indian beneficiaries. The 
MMS performs the mineral revenue management functions for the Secretary 
and assists the Secretary in carrying out the Department's trust 
responsibility for Indian lands. Public laws pertaining to mineral 
revenues are on our Web site at http://www.mrm.mms.gov/Laws_R_D/PublicLawsAMR.htm.
    Regulations at 30 CFR 243 govern the suspension of orders or 
decisions pending administrative appeal for Federal and Indian 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 
Federal leases, 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. 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 in an amount or 
value of production from the leased lands. The lessee is required to 
report various kinds of information to the lessor relative to the 
disposition of the leased minerals. Such information 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 accurately valued and appropriately paid.
    Proprietary information submitted to MMS under this collection is 
protected, and no items of a sensitive nature are collected. A response 
is voluntary and required to obtain the benefit of suspending 
compliance of an order pending appeal.

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--
Minerals Revenue Management Appeal Procedures. Pending appeal, MMS 
suspends the payment requirement if the appellant submits a formal 
agreement of payment

[[Page 37483]]

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, 
MMS must draw down the total amount due, which is defined as unpaid 
principal plus the 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. These instructions for the five surety types 
discussed below can also be found at http://www.mrm.mms.gov/ReportingServices/PDFDocs/SuretyInst.pdf.

Forms and Other Surety Types

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 on the bond 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 MRM-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 on 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. The MMS will also include 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 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 
on 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 oil and gas 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 accepts only a book-entry TS.

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.

[[Page 37484]]

    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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                                                                                                          Annual
      Citation 30 CFR 243             Reporting and recordkeeping      Hour burden   Average number of    burden
                                              requirement                             annual responses    hours
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                                          Subpart A--General Provisions
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243.4(a)(1)....................  How do I suspend compliance with an   1 hour       75 surety                 75
                                  order?                                             instruments
                                 (a) If you timely appeal an order,                  (including Forms
                                  and if that order or portion of                    MMS-4435, MMS-
                                  that order: (1) Requires you to                    4436, and MMS-
                                  make a payment, and you want to                    4437, or TS).
                                  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 person meet    Burden hours covered under Sec.
                                  the bonding or financial solvency     243.4(a)(1).
                                  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 when posting a  Burden hours covered under Sec.
                                  bond or other surety instrument or    243.4(a)(1).
                                  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 my obligation   Burden hours covered under Sec.
                                  to comply with an order?              243.4(a)(1).
                                 (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.
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                                         Subpart B--Bonding Requirements
----------------------------------------------------------------------------------------------------------------
243.101(b).....................  How will MMS determine the amount of  Burden hours covered under Sec.
                                  my bond or other surety instrument?   243.4(a)(1).
                                 * * * (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 * * *.
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                                   Subpart C--Financial Solvency Requirements
----------------------------------------------------------------------------------------------------------------
243.200(a) and (b).............  How do I demonstrate financial        1 hour       65 self-bonding           65
                                  solvency?                                          submissions
                                 (a) To demonstrate financial                        (demonstration of
                                  solvency under this part, you must                 financial
                                  submit an audited consolidated                     solvency).
                                  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. * * *

[[Page 37485]]

 
243.201(c)(1), (c)(2)(i) and     How will MMS determine if I am        Burden hours covered under Sec.  Sec.
 (c)(2)(ii) and 243.201(d)(2).    financially solvent?                  243.4(a)(1) and 243.200(a) and (b).
                                 * * * (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 my financial    Burden hours covered under Sec.
                                  solvency?                             243.4(a)(1).
                                 * * * (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 
three years, or 5 appellants per year, 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.
    To comply with the public consultation process, we published a 
notice in the Federal Register on August 13, 2007 (72 FR 45264), 
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 
July 31, 2008.
    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.

    Date April 24, 2008.
Richard J. Adamski,
Acting Associate Director for Minerals Revenue Management.
[FR Doc. E8-14894 Filed 6-30-08; 8:45 am]
BILLING CODE 4310-MR-P