[Federal Register Volume 73, Number 132 (Wednesday, July 9, 2008)]
[Notices]
[Pages 39331-39334]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-15495]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service

[Docket No. MMS-2008-MRM-0009]


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 1010-0073).

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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 220. This notice also 
provides the public a second opportunity to comment on the paperwork 
burden of these regulatory requirements. The previous title of this ICR 
was ``30 CFR Part 220--Accounting Procedures for Determining Net Profit 
Share Payment for Outer Continental Shelf Oil and Gas Leases, Sec.  
220.010 NPSL capital account, Sec.  220.030 Maintenance of records, 
Sec.  220.031 Reporting and payment requirements, Sec.  220.032 
Inventories, and Sec.  220.033 Audits.'' The new title of this ICR is 
``30 CFR Part 220, OCS Net Profit Share Payment Reporting.'' There are 
no forms associated with this information collection.

DATES: Submit written comments on or before August 8, 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 1010-0073).
    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 1010-0073 
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 1010-0073 in your comments.

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

SUPPLEMENTARY INFORMATION:
    Title: 30 CFR Part 220, OCS Net Profit Share Payment Reporting.
    OMB Control Number: 1010-0073.
    Bureau Form Number: None.
    Abstract: The Secretary of the U.S. Department of the Interior is 
responsible for matters relevant to mineral resource development on 
Federal lands and the Outer Continental Shelf (OCS). The Secretary is 
responsible for managing the production of minerals from Federal 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 MMS performs the mineral revenue 
management functions for the Secretary.
    The MMS collects and uses this information to determine all 
allowable direct and allocable joint costs incurred during the lease 
term, appropriate overhead allowance permitted on these costs under 
Sec.  220.012, and allowances for capital recovery calculated under 
Sec.  220.020. The MMS also collects this information to ensure 
royalties or net

[[Page 39332]]

profit share payments are accurately valued and appropriately paid. 
This ICR affects only oil and gas leases on submerged Federal lands on 
the OCS.
    Applicable legal citations pertaining to mineral leases include 
Public Law 97-451--Jan. 12, 1983 (Federal Oil and Gas Royalty 
Management Act of 1982); Public Law 104-185--Aug. 13, 1996 (Federal Oil 
and Gas Royalty Simplification and Fairness Act of 1996), as corrected 
by Public Law 104-200--Sept. 22, 1996; the Mineral Leasing Act of 1920 
(30 U.S.C. 1923); and the Outer Continental Shelf Lands Act (43 U.S.C. 
1353). These citations can be viewed at http://www.mrm.mms.gov/Laws_R_D/PublicLawsAMR.htm.
    Title 30 CFR part 220 covers the net profit share lease (NPSL) 
program and establishes reporting requirements for determining the net 
profit share base and calculating net profit share payments due the 
Federal Government for the production of oil and gas from OCS leases.

Net Profit Share Leases (NPSL) Bidding System

    To encourage exploration, development, and production of oil and 
gas lease resources on submerged Federal lands on the Outer Continental 
Shelf (OCS), regulations were promulgated at 30 CFR part 260--Outer 
Continental Shelf Oil and Gas Leasing. Part 260, subpart B establishes 
the bidding systems that MMS may use to offer and sell Federal leases. 
Specific implementation regulations for the NPSL bidding system are 
promulgated at Sec.  260.110(d) of part 260, subpart B. The MMS 
established the NPSL bidding system to balance a fair market return to 
the Federal Government for the lease of its public lands with a fair 
profit to companies risking their investment capital. The system 
provides an incentive for early and expeditious exploration and 
development and provides for sharing the risks by the lessee and the 
Federal Government. The NPSL bidding system incorporates a fixed 
capital recovery system as a means through which the lessee recovers 
costs of exploration and development from production revenues, along 
with a reasonable return on investment.

NPSL Capital Account Payment Reporting

    Under Sec.  220.031(b), the lessee report and pay NPSL payment due 
the Federal Government beginning with the first month in which 
production revenues are credited to the NPSL capital account not later 
than 60 days following the end of each month.
    The Federal Government does not receive a profit share payment from 
an NPSL until the lessee shows a credit balance in its capital account; 
that is, cumulative revenues and other credits exceed cumulative costs. 
The credit balance is multiplied by the net profit share rate (30 to 50 
percent), resulting in the amount of net profit share payment due the 
Federal Government.
    The MMS requires lessees to maintain an NPSL capital account for 
each lease, which transfers to a new owner when sold. Following the 
cessation of production, lessees are also required to provide either an 
annual or a monthly report to the Federal Government, using data from 
the capital account.

NPSL Inventories

    The NPSL lessees must notify MMS of their intent to perform an 
inventory and file a report after each inventory of controllable 
materiel.

NPSL Audits

    When non-operators of an NPSL call for an audit, they must notify 
MMS. When MMS calls for an audit, the lessee must notify all non-
operators on the lease. These requirements are located at Sec.  
220.033.

Summary

    This collection of information is necessary in order to determine 
when net profit share payments are due and to ensure royalties or net 
profit share payments are properly valued and appropriately paid.
    The MMS will request OMB's approval to continue to collect this 
information. Not collecting this information would limit the 
Secretary's ability to discharge his/her duty and may also result in 
loss of royalty payments. Proprietary information submitted to MMS 
under this collection is protected, and there are no questions of a 
sensitive nature included in this information collection.
    Frequency: Annually, monthly, and on occasion.
    Estimated Number and Description of Respondents: 6 lessees.
    Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 1,046 
hours.
    All six lessees report monthly because all current NPSLs are in 
producing status. Because the requirements for establishment of capital 
accounts at Sec.  220.010(a) and capital account annual reporting at 
Sec.  220.031(a) are necessary only during non-producing status of a 
lease, we included only one response annually for these requirements, 
in case a new NPSL is established. We have not included in our 
estimates certain requirements performed in the normal course of 
business, which are considered usual and customary. The following chart 
shows the estimated annual burden hours by CFR section and paragraph.

                                   Respondents' Estimated Annual Burden Hours
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                                                                                     Number of
        Citation 30 CFR 220           Reporting & recordkeeping     Hour burden       annual       Annual burden
                                             requirement                             responses         hours
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Part 220--Accounting Procedures for Determining Net Profit Share Payment for Outer Continental Shelf Oil and Gas
                                                     Leases
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                                       Sec.   220.010 NPSL capital account
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220.010(a).........................  (a) For each NPSL tract, an               1               1               1
                                      NPSL capital account shall
                                      be established and
                                      maintained by the lessee
                                      for NPSL operations * * *.
----------------------------------------------------------------------------------------------------------------
                                      Sec.   220.030 Maintenance of records
----------------------------------------------------------------------------------------------------------------
220.030(a) and (b).................  (a) Each lessee * * * shall               1               6               6
                                      establish and maintain
                                      such records as are
                                      necessary * * *.
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[[Page 39333]]

 
                                Sec.   220.031 Reporting and payment requirements
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220.031(a).........................  (a) Each lessee subject to                1               1               1
                                      this part shall file an
                                      annual report during the
                                      period from issuance of
                                      the NPSL until the first
                                      month in which production
                                      revenues are credited to
                                      the NPSL capital account *
                                      * *.
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220.031(b).........................  (b) Beginning with the                   13          72 \1\             936
                                      first month in which
                                      production revenues are
                                      credited to the NPSL
                                      capital account, each
                                      lessee * * * shall file a
                                      report for each NPSL, not
                                      later than 60 days
                                      following the end of each
                                      month * * *.
                                                                 -----------------------------------------------
220.031(c).........................  (c) Each lessee subject to    Burden hours covered under Sec.   220.031(b).
                                      this Part 220 shall
                                      submit, together with the
                                      report required * * * any
                                      net profit share payment
                                      due * * *.
                                                                 -----------------------------------------------
220.031(d).........................  (d) Each lessee * * * shall               8               6              48
                                      file a report not later
                                      than 90 days after each
                                      inventory is taken * * *.
220.031(e).........................  (e) Each lessee * * * shall               4               6              24
                                      file a final report, not
                                      later than 60 days
                                      following the cessation of
                                      production * * *.
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                                           Sec.   220.032 Inventories
----------------------------------------------------------------------------------------------------------------
220.032(b).........................  (b) At reasonable                         1               6               6
                                      intervals, but at least
                                      once every three years,
                                      inventories of
                                      controllable materiel
                                      shall be taken by the
                                      lessee. Written notice of
                                      intention to take
                                      inventory shall be given
                                      by the lessee at least 30
                                      days before any inventory
                                      is to be taken so that the
                                      Director may be
                                      represented at the taking
                                      of inventory * * *.
----------------------------------------------------------------------------------------------------------------
                                              Sec.   220.033 Audits
----------------------------------------------------------------------------------------------------------------
220.033(b)(1)......................  (b)(1) When nonoperators of               2               6              12
                                      an NPSL lease call an
                                      audit in accordance with
                                      the terms of their
                                      operating agreement, the
                                      Director shall be notified
                                      of the audit call * * *.
----------------------------------------------------------------------------------------------------------------
220.033(b)(2)......................  (b)(2) If DOI determines to               2               6              12
                                      call for an audit, DOI
                                      shall notify the lessee of
                                      its audit call and set a
                                      time and place for the
                                      audit * * *. The lessee
                                      shall send copies of the
                                      notice to the nonoperators
                                      on the lease * * *.
                                                                 -----------------------------------------------
220.033(e).........................  (e) Records required to be   The Office of Regulatory Affairs determined
                                      kept under Sec.             that the audit process is exempt from the
                                      220.030(a) shall be made    Paperwork Reduction Act of 1995 because MMS
                                      available for inspection    staff asks non-standard questions to resolve
                                      by any authorized agent of  exceptions.
                                      DOI * * *.
                                    ----------------------------------------------------------------------------
    Total Burden...................  ...........................  ..............             110           1,046
----------------------------------------------------------------------------------------------------------------
\1\(6 NPSL reports x 12 months = 72 reports).

    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: 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 October 2, 2007 (72 FR 56090), 
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 
August 8, 2008.
    Public Comment Policy: We will post all comments in response to 
this notice

[[Page 39334]]

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: May 6, 2008.
Shirley M. Conway,
Acting Associate Director for Minerals Revenue Management.
[FR Doc. E8-15495 Filed 7-8-08; 8:45 am]
BILLING CODE 4310-MR-P