[Federal Register Volume 73, Number 149 (Friday, August 1, 2008)]
[Notices]
[Pages 45055-45065]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-17730]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service

[Docket No. MMS-2008-MRM-0029]


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 1010-0103).

-----------------------------------------------------------------------

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 information collection request 
(ICR) to meet OMB requirements. The new title of this ICR is ``30 CFR 
Parts 202, 206, and 207, Indian Oil and Gas Valuation.''

DATES: Submit written comments on or before September 2, 2008.

ADDRESSES: You may submit comments by the following methods:
     Electronically go to http://www.regulations.gov. In the 
``Comment or Submission'' column, enter ``MMS-2008-MRM-0029'' 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 Hyla Hurst, Regulatory Specialist, 
Minerals Management Service, Minerals Revenue Management, P.O. Box 
25165, MS 302B2, Denver, Colorado 80225. Please reference ICR 1010-0103 
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 1010-0103 in your comments.

FOR FURTHER INFORMATION CONTACT: Hyla Hurst, telephone (303) 231-3495, 
or e-mail [email protected]. You may also contact Hyla Hurst 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 Parts 202, 206, and 207, Indian Oil and Gas 
Valuation.
    OMB Control Number: 1010-0103.
    Bureau Form Number: Forms MMS-4109, MMS-4110, MMS-4295, MMS-4410, 
and MMS-4411.
    Abstract: The Secretary of the U.S. 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). Under the Mineral Leasing Act (30 U.S.C. 1923), the Indian 
Mineral Development Act of 1982 (25 U.S.C. 2103), and the Outer 
Continental Shelf Lands Act (43 U.S.C. 1353), the Secretary is 
responsible for (1) Managing the production of minerals from Federal 
and Indian lands and the OCS; (2) collecting royalties and other 
mineral revenues from lessees who produce minerals; and (3) 
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 minerals revenue management functions and assists the 
Secretary in carrying out the Department's trust responsibility for 
Indian lands. Applicable 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 202, subparts C and J, pertain to 
royalties; part 206, subparts B and E, govern the valuation of oil and 
gas produced from leases on Indian lands; and part 207 pertains to 
recordkeeping. Indian tribes and individual Indian mineral owners 
receive all royalties generated from their lands. Determining product 
valuation is essential to ensure that Indian tribes and individual 
Indian mineral owners receive payment on the full value of the minerals 
removed from their lands. Failure to collect the data described in this 
information collection could result in the undervaluation of leased 
minerals on Indian lands. All data reported is subject to subsequent 
audit and adjustment.

Indian Oil

    The regulations apply to all oil production from Indian oil and gas 
leases, except leases on the Osage Indian Reservation. The regulations 
provide that lessees determine the value of oil based on the higher of: 
(1) The gross proceeds under an arm's-length contract, or (2) major 
portion analysis. These oil valuation methods are eligible for 
applicable transportation allowances. From information collected

[[Page 45056]]

on Form MMS-4110, Oil Transportation Allowance Report, MMS verifies 
transportation allowances during the product valuation verification to 
determine if the lessee reported and paid the proper royalty amount. 
The MMS and tribal personnel evaluate whether the transportation 
allowances reported and claimed by lessees are within regulatory 
allowance limitations.

Indian Gas

    The regulations apply to all gas production from Indian oil and gas 
leases, except leases on the Osage Indian Reservation. Most Indian 
leases contain the requirement to perform accounting for comparison 
(dual accounting) for gas produced from the lease. Lessees must elect 
to perform actual dual accounting as defined in 30 CFR 206.176 or 
alternative dual accounting as defined in 30 CFR 206.173. Lessees use 
Form MMS-4410, Accounting for Comparison [Dual Accounting], to certify 
that dual accounting is not required on an Indian lease or to make an 
election for actual or alternative dual accounting for Indian leases.
    The regulations require lessees to submit Form MMS-4411, Safety Net 
Report, when gas production from an Indian oil or gas lease is sold 
beyond the first index pricing point. The safety net calculation 
establishes the minimum value, for royalty purposes, of natural gas 
production from Indian oil and gas leases. This reporting requirement 
ensures that Indian lessors receive all royalties due and aids MMS 
compliance efforts.
    The MMS and tribal personnel use the information collected on Form 
MMS-4295, Gas Transportation Allowance Report, to evaluate whether 
transportation allowances reported under a non-arm's-length contract or 
no contract are reasonable, and actual costs are within regulatory 
allowance limitations.
    The MMS and tribal personnel use the information collected on Form 
MMS-4109, Gas Processing Allowance Summary Report, to evaluate whether 
processing allowances reported under a non-arm's-length contract or no 
contract are reasonable, and actual costs are within regulatory 
allowance limitations.

Indian Oil and Gas

    Form MMS-4393, Request to Exceed Regulatory Allowance Limitation, 
is used for both Federal and Indian leases. Most of the burden hours 
are incurred on Federal leases; therefore, the form is approved under 
ICR 1010-0136, pertaining to Federal oil and gas leases. However, we 
include a discussion of the form in this ICR, as well as the burden 
hours for Indian leases. To request permission to exceed a regulatory 
allowance limit, lessees must submit a letter to MMS explaining why a 
higher allowance limit is necessary and provide supporting 
documentation, including a completed Form MMS-4393. This form provides 
MMS with the data necessary to make a decision whether to approve or 
deny the request and track deductions on royalty reports.

Summary

    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 to Indian tribes and individual Indian mineral 
owners. Proprietary information submitted to MMS under this collection 
is protected, and no items of a sensitive nature are collected. The 
requirement to respond is mandatory for Form MMS-4411, Safety Net 
Report, when certain circumstances exist. For all other forms in this 
collection, the requirement to respond is voluntary; i.e., a response 
is required to obtain a benefit.
    Frequency of Response: Annually and on occasion.
    Estimated Number and Description of Respondents: 302 Indian 
lessees.
    Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 1,074 
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:

                                   Respondents' Estimated Annual Burden Hours
----------------------------------------------------------------------------------------------------------------
                                               Reporting and                      Average number
                 30 CFR                        recordkeeping        Hour burden      of annual     Annual burden
                                                requirement                          responses         hours
----------------------------------------------------------------------------------------------------------------
                                                 202--ROYALTIES
                                        Subpart C--Federal and Indian Oil
----------------------------------------------------------------------------------------------------------------
202.101.................................  Standards for           Burden covered under OMB Control Number 1010-
                                           reporting and paying   0140 (expires 11/30/2009). Burden covered
                                           royalties.             under Sec.   210.52.
                                          Oil volumes are to be
                                           reported in barrels
                                           of clean oil of 42
                                           standard U.S. gallons
                                           (231 cubic inches
                                           each) at 60 [deg]F. *
                                           * *
----------------------------------------------------------------------------------------------------------------
                                  Subpart J--Gas Production From Indian Leases
----------------------------------------------------------------------------------------------------------------
202.551(b)..............................  How do I determine the  Burden covered under OMB Control Number 1010-
                                           volume of production   0140. Burden covered under Sec.   210.52.
                                           for which I must pay
                                           royalty if my lease
                                           is not in an approved
                                           Federal unit or
                                           communitization
                                           agreement (AFA)?
                                          (b) You and all other
                                           persons paying
                                           royalties on the
                                           lease must report and
                                           pay royalties based
                                           on your takes. * * *
----------------------------------------------------------------------------------------------------------------
202.551(c)..............................  (c) You and all other                1               1               1
                                           persons paying
                                           royalties on the
                                           lease may ask MMS for
                                           permission * * *
----------------------------------------------------------------------------------------------------------------
202.558(a) and (b)......................  What standards do I     Burden covered under OMB Control Number 1010-
                                           use to report and pay  0140. Burden covered under Sec.   210.52.
                                           royalties on gas?
                                          (a) You must report
                                           gas volumes as
                                           follows: * * *
                                          (b) You must report
                                           residue gas and gas
                                           plant product volumes
                                           as follows: * * *
----------------------------------------------------------------------------------------------------------------

[[Page 45057]]

 
                                             206--PRODUCT VALUATION
                                              Subpart B--Indian Oil
----------------------------------------------------------------------------------------------------------------
206.56(b)(2)............................  Transportation          Burden covered under OMB Control Number 1010-
                                           allowances--general.   0136 (expires 06/30/2009).
                                          (b)(2) Upon request of
                                           a lessee, MMS may
                                           approve a
                                           transportation
                                           allowance deduction
                                           in excess of the
                                           limitation prescribed
                                           by paragraph (b)(1)
                                           of this section. * *
                                           * An application for
                                           exception (using Form
                                           MMS-4393, Request to
                                           Exceed Regulatory
                                           Allowance Limitation)
                                           must contain all
                                           relevant and
                                           supporting
                                           documentation
                                           necessary for MMS to
                                           make a determination.
                                           * * *
----------------------------------------------------------------------------------------------------------------
206.57(a)(1)(i).........................  Determination of        AUDIT PROCESS. See note.
                                           transportation
                                           allowances.
                                          (a) Arm's-length
                                           transportation
                                           contracts.
                                          (1)(i) * * * The
                                           lessee shall have the
                                           burden of
                                           demonstrating that
                                           its contract is arm's-
                                           length.
----------------------------------------------------------------------------------------------------------------
206.57(a)(1)(i).........................  (a) Arm's-length        Burden covered under Sec.   206.57(c)(1)(i)
                                           transportation         and (iii).
                                           contracts.
                                          (1)(i) * * * Before
                                           any deduction may be
                                           taken, the lessee
                                           must submit a
                                           completed page one of
                                           Form MMS-4110 (and
                                           Schedule 1), Oil
                                           Transportation
                                           Allowance Report * *
                                           *
----------------------------------------------------------------------------------------------------------------
206.57(a)(1)(iii).......................  (a) Arm's-length        AUDIT PROCESS. See note.
                                           transportation
                                           contracts.
                                          (1)(iii) * * * When
                                           MMS determines that
                                           the value of the
                                           transportation may be
                                           unreasonable, MMS
                                           will notify the
                                           lessee and give the
                                           lessee an opportunity
                                           to provide written
                                           information
                                           justifying the
                                           lessee's
                                           transportation costs.
----------------------------------------------------------------------------------------------------------------
206.57(a)(2)(i).........................  (a) Arm's-length        Burden covered under Sec.   206.57(a)(3).
                                           transportation
                                           contracts.
                                          (2)(i) * * * Except as
                                           provided in this
                                           paragraph, no
                                           allowance may be
                                           taken for the costs
                                           of transporting lease
                                           production which is
                                           not royalty-bearing
                                           without MMS approval.
----------------------------------------------------------------------------------------------------------------
206.57(a)(2)(ii)........................  (a) Arm's-length                    20               1              20
                                           transportation
                                           contracts.
                                          (2)(ii)
                                           Notwithstanding the
                                           requirements of
                                           paragraph (i), the
                                           lessee may propose to
                                           MMS a cost allocation
                                           method on the basis
                                           of the values of the
                                           products transported.
                                           * * *
----------------------------------------------------------------------------------------------------------------
206.57(a)(3)............................  (a) Arm's-length                    40               1              40
                                           transportation
                                           contracts.
                                          (3) If an arm's-length
                                           transportation
                                           contract includes
                                           both gaseous and
                                           liquid products, and
                                           the transportation
                                           costs attributable to
                                           each product cannot
                                           be determined from
                                           the contract, the
                                           lessee shall propose
                                           an allocation
                                           procedure to MMS. * *
                                           * The lessee shall
                                           submit all available
                                           data to support its
                                           proposal. * * *
----------------------------------------------------------------------------------------------------------------
206.57(b)(1)............................  (b) Non-arm's-length    Burden covered under Sec.   206.57(c)(2)(i),
                                           or no contract.        and (c)(2)(iii).
                                          (1) * * * A
                                           transportation
                                           allowance may be
                                           claimed retroactively
                                           for a period of not
                                           more than 3 months
                                           prior to the first
                                           day of the month that
                                           Form MMS-4110 is
                                           filed with MMS,
                                           unless MMS approves a
                                           longer period upon a
                                           showing of good cause
                                           by the lessee. * * *
----------------------------------------------------------------------------------------------------------------
206.57(b)(1)............................  (b) Non-arm's-length    Burden covered under OMB Control Number 1010-
                                           or no contract.        0140. Burden covered under Sec.   210.52.
                                          (1) * * * When
                                           necessary or
                                           appropriate, MMS may
                                           direct a lessee to
                                           modify its actual
                                           transportation
                                           allowance deduction.
----------------------------------------------------------------------------------------------------------------
206.57(b)(2)(iv)........................  (b) Non-arm's-length                20               1              20
                                           or no contract.
                                          (2)(iv) * * * After a
                                           lessee has elected to
                                           use either method for
                                           a transportation
                                           system, the lessee
                                           may not later elect
                                           to change to the
                                           other alternative
                                           without approval of
                                           MMS.
----------------------------------------------------------------------------------------------------------------
206.57(b)(2)(iv)(A).....................  (b) Non-arm's-length                20               1              20
                                           or no contract.
                                          (2)(iv)(A) * * * After
                                           an election is made,
                                           the lessee may not
                                           change methods
                                           without MMS approval.
                                           * * *
----------------------------------------------------------------------------------------------------------------

[[Page 45058]]

 
206.57(b)(3)(i).........................  (b) Non-arm's-length                40               1              40
                                           or no contract.
                                          (3)(i) * * * Except as
                                           provided in this
                                           paragraph, the lessee
                                           may not take an
                                           allowance for
                                           transporting lease
                                           production which is
                                           not royalty bearing
                                           without MMS approval.
----------------------------------------------------------------------------------------------------------------
206.57(b)(3)(ii)........................  (b) Non-arm's-length                20               1              20
                                           or no contract.
                                          (3)(ii)
                                           Notwithstanding the
                                           requirements of
                                           paragraph (i), the
                                           lessee may propose to
                                           MMS a cost allocation
                                           method on the basis
                                           of the values of the
                                           products transported.
                                           * * *
----------------------------------------------------------------------------------------------------------------
206.57(b)(4)............................  (b) Non-arm's-length                20               1              20
                                           or no contract.
                                          (4) Where both gaseous
                                           and liquid products
                                           are transported
                                           through the same
                                           transportation
                                           system, the lessee
                                           shall propose a cost
                                           allocation procedure
                                           to MMS. * * * The
                                           lessee shall submit
                                           all available data to
                                           support its proposal.
                                           * * *
----------------------------------------------------------------------------------------------------------------
206.57(b)(5)............................  (b) Non-arm's-length                20               1              20
                                           or no contract.
                                          (5) A lessee may apply
                                           to MMS for an
                                           exception from the
                                           requirement that it
                                           compute actual costs
                                           in accordance with
                                           paragraphs (b)(1)
                                           through (b)(4) of
                                           this section. * * *
----------------------------------------------------------------------------------------------------------------
206.57(c)(1)(i).........................  (c) Reporting                        4               4              16
                                           requirements.
                                          (1) Arm's-length
                                           contracts. (i) With
                                           the exception of
                                           those transportation
                                           allowances specified
                                           in paragraphs
                                           (c)(1)(v) and
                                           (c)(1)(vi) of this
                                           section, the lessee
                                           shall submit page one
                                           of the initial Form
                                           MMS-4110 (and
                                           Schedule 1), Oil
                                           Transportation
                                           Allowance Report,
                                           prior to, or at the
                                           same time as, the
                                           transportation
                                           allowance determined,
                                           under an arm's-length
                                           contract, is reported
                                           on Form MMS-2014,
                                           Report of Sales and
                                           Royalty Remittance. *
                                           * *
----------------------------------------------------------------------------------------------------------------
206.57(c)(1)(iii).......................  (c) Reporting                        4               4              16
                                           requirements.
                                          (1) Arm's-length
                                           contracts. (iii)
                                           After the initial
                                           reporting period and
                                           for succeeding
                                           reporting periods,
                                           lessees must submit
                                           page one of Form MMS-
                                           4110 (and Schedule 1)
                                           within 3 months after
                                           the end of the
                                           calendar year, or
                                           after the applicable
                                           contract or rate
                                           terminates or is
                                           modified or amended,
                                           whichever is earlier,
                                           unless MMS approves a
                                           longer period (during
                                           which period the
                                           lessee shall continue
                                           to use the allowance
                                           from the previous
                                           reporting period).
----------------------------------------------------------------------------------------------------------------
206.57(c)(1)(iv)........................  (c) Reporting           AUDIT PROCESS. See note.
                                           requirements.
                                          (1) Arm's-length
                                           contracts. (iv) MMS
                                           may require that a
                                           lessee submit arm's-
                                           length transportation
                                           contracts, production
                                           agreements, operating
                                           agreements, and
                                           related documents.
                                           Documents shall be
                                           submitted within a
                                           reasonable time, as
                                           determined by MMS.
----------------------------------------------------------------------------------------------------------------
206.57(c)(2)(i).........................  (c) Reporting                        6               1               6
                                           requirements.
                                          (2) Non-arm's-length
                                           or no contract.
                                          (i) With the exception
                                           of those
                                           transportation
                                           allowances specified
                                           in paragraphs
                                           (c)(2)(v),
                                           (c)(2)(vii) and
                                           (c)(2)(viii) of this
                                           section, the lessee
                                           shall submit an
                                           initial Form MMS-4110
                                           prior to, or at the
                                           same time as, the
                                           transportation
                                           allowance determined
                                           under a non-arm's-
                                           length contract or no-
                                           contract situation is
                                           reported on Form MMS-
                                           2014. * * * The
                                           initial report may be
                                           based upon estimated
                                           costs.
----------------------------------------------------------------------------------------------------------------

[[Page 45059]]

 
206.57(c)(2)(iii).......................  (c) Reporting                        6               3              18
                                           requirements.
                                          (2) Non-arm's-length
                                           or no contract.
                                          (iii) For calendar-
                                           year reporting
                                           periods succeeding
                                           the initial reporting
                                           period, the lessee
                                           shall submit a
                                           completed Form MMS-
                                           4110 containing the
                                           actual costs for the
                                           previous reporting
                                           period. If oil
                                           transportation is
                                           continuing, the
                                           lessee shall include
                                           on Form MMS-4110 its
                                           estimated costs for
                                           the next calendar
                                           year. * * * MMS must
                                           receive the Form MMS-
                                           4110 within 3 months
                                           after the end of the
                                           previous reporting
                                           period, unless MMS
                                           approves a longer
                                           period (during which
                                           period the lessee
                                           shall continue to use
                                           the allowance from
                                           the previous
                                           reporting period).
----------------------------------------------------------------------------------------------------------------
206.57(c)(2)(iv)........................  (c) Reporting           Burden covered under Sec.   206.57(c)(2)(i).
                                           requirements.
                                          (2) Non-arm's-length
                                           or no contract.
                                          (iv) For new
                                           transportation
                                           facilities or
                                           arrangements, the
                                           lessee's initial Form
                                           MMS-4110 shall
                                           include estimates of
                                           the allowable oil
                                           transportation costs
                                           for the applicable
                                           period. * * *
----------------------------------------------------------------------------------------------------------------
206.57(c)(2)(v).........................  (c) Reporting           Burden covered under Sec.   206.57(c)(2)(i).
                                           requirements.
                                          (2) Non-arm's-length
                                           or no contract.
                                          (v) * * * only those
                                           allowances that have
                                           been approved by MMS
                                           in writing * * *
----------------------------------------------------------------------------------------------------------------
206.57(c)(2)(vi)........................  (c) Reporting           AUDIT PROCESS. See note.
                                           requirements.
                                          (2) Non-arm's-length
                                           or no contract.
                                          (vi) Upon request by
                                           MMS, the lessee shall
                                           submit all data used
                                           to prepare its Form
                                           MMS-4110. The data
                                           shall be provided
                                           within a reasonable
                                           period of time, as
                                           determined by MMS.
----------------------------------------------------------------------------------------------------------------
206.57(c)(4) and (e)(2).................  (c) Reporting           Burden covered under OMB Control Number 1010-
                                           requirements.          0140. Burden covered under Sec.   210.52.
                                          (4) Transportation
                                           allowances must be
                                           reported as a
                                           separate line item on
                                           Form MMS-2014 * * *
                                          (e) Adjustments.
                                          (2) For lessees
                                           transporting
                                           production from
                                           Indian leases, the
                                           lessee must submit a
                                           corrected Form MMS-
                                           2014 to reflect
                                           actual costs * * *
----------------------------------------------------------------------------------------------------------------
206.59..................................  May I ask MMS for                   20               1              20
                                           valuation guidance?
                                          You may ask MMS for
                                           guidance in
                                           determining value.
                                           You may propose a
                                           value method to MMS.
                                           Submit all available
                                           data related to your
                                           proposal and any
                                           additional
                                           information MMS deems
                                           necessary. * * *
----------------------------------------------------------------------------------------------------------------
206.61(a) and (b).......................  What records must I     AUDIT PROCESS. See note.
                                           keep and produce?
                                          (a) On request, you
                                           must make available
                                           sales, volume, and
                                           transportation data
                                           for production you
                                           sold, purchased, or
                                           obtained from the
                                           field or area. You
                                           must make this data
                                           available to MMS,
                                           Indian
                                           representatives, or
                                           other authorized
                                           persons.
                                          (b) You must retain
                                           all data relevant to
                                           the determination of
                                           royalty value. * * *
----------------------------------------------------------------------------------------------------------------
                                             206--PRODUCT VALUATION
                                              Subpart E--Indian Gas
----------------------------------------------------------------------------------------------------------------
206.172(b)(1)(ii).......................  How do I value gas                   4              25             100
                                           produced from leases
                                           in an index zone?
                                          (b) Valuing residue
                                           gas and gas before
                                           processing.
                                          (1)(ii) Gas production
                                           that you certify on
                                           Form MMS-4410 * * *
                                           is not processed
                                           before it flows into
                                           a pipeline with an
                                           index but which may
                                           be processed later *
                                           * *
----------------------------------------------------------------------------------------------------------------

[[Page 45060]]

 
206.172(e)(6)(i) and (iii)..............  (e) Determining the                  3              10              30
                                           minimum value for
                                           royalty purposes of
                                           gas sold beyond the
                                           first index pricing
                                           point.
                                          (6)(i) You must report
                                           the safety net price
                                           for each index zone
                                           to MMS on Form MMS-
                                           4411, Safety Net
                                           Report, no later than
                                           June 30 following
                                           each calendar year; *
                                           * *
                                          (iii) MMS may order
                                           you to amend your
                                           safety net price
                                           within one year from
                                           the date your Form
                                           MMS-4411 is due or is
                                           filed, whichever is
                                           later. * * *
----------------------------------------------------------------------------------------------------------------
206.172(e)(6)(ii).......................  (e) Determining the     Burden covered under OMB Control Number 1010-
                                           minimum value for      0140. Burden covered under Sec.   210.52.
                                           royalty purposes of
                                           gas sold beyond the
                                           first index pricing
                                           point.
                                          (6)(ii) You must pay
                                           and report on Form
                                           MMS-2014 additional
                                           royalties due no
                                           later than June 30
                                           following each
                                           calendar year * * *
----------------------------------------------------------------------------------------------------------------
206.172(f)(1)(ii), (f)(2), and (f)(3)...  (f) Excluding some or               40               1              40
                                           all tribal leases
                                           from valuation under
                                           this section.
                                          (1) An Indian tribe
                                           may ask MMS to
                                           exclude some or all
                                           of its leases from
                                           valuation under this
                                           section. * * *
                                          (ii) If an Indian
                                           tribe requests
                                           exclusion from an
                                           index zone for less
                                           than all of its
                                           leases, MMS will
                                           approve the request
                                           only if the excluded
                                           leases may be
                                           segregated into one
                                           or more groups based
                                           on separate fields
                                           within the
                                           reservation.
                                          (2) An Indian tribe
                                           may ask MMS to
                                           terminate exclusion
                                           of its leases from
                                           valuation under this
                                           section. * * *
                                          (3) The Indian tribe's
                                           request to MMS under
                                           either paragraph
                                           (f)(1) or (2) of this
                                           section must be in
                                           the form of a tribal
                                           resolution. * * *
----------------------------------------------------------------------------------------------------------------
206.173(a)(1)...........................  How do I calculate the               2              19              38
                                           alternative
                                           methodology for dual
                                           accounting?
                                          (a) Electing a dual
                                           accounting method.
                                          (1) * * * You may
                                           elect to perform the
                                           dual accounting
                                           calculation according
                                           to either 206.176(a)
                                           (called actual dual
                                           accounting), or
                                           paragraph (b) of this
                                           section (called the
                                           alternative
                                           methodology for dual
                                           accounting).
----------------------------------------------------------------------------------------------------------------
206.173(a)(2)...........................  (a) Electing a dual     Burden covered under Sec.   206.173(a)(1).
                                           accounting method.
                                          (2) You must make a
                                           separate election to
                                           use the alternative
                                           methodology for dual
                                           accounting for your
                                           Indian leases in each
                                           MMS-designated area.
                                           * * *
----------------------------------------------------------------------------------------------------------------
206.174(a)(4)(ii).......................  How do I value gas      Burden covered under OMB Control Number 1010-
                                           production when an     0140. Burden covered under Sec.   210.52.
                                           index-based method
                                           cannot be used?
                                          (a) Situations in
                                           which an index-based
                                           method cannot be
                                           used.
                                          (4)(ii) If the major
                                           portion value is
                                           higher, you must
                                           submit an amended
                                           Form MMS-2014 to MMS
                                           by the due date
                                           specified in the
                                           written notice from
                                           MMS of the major
                                           portion value. * * *
----------------------------------------------------------------------------------------------------------------
206.174(b)(1)(i) and (iii); (b)(2);       (b) Arm's-length        AUDIT PROCESS. See note.
 (d)(2).                                   contracts.
                                          (1)(i) You have the
                                           burden of
                                           demonstrating that
                                           your contract is
                                           arm's-length. * * *
                                          (iii) * * * In these
                                           circumstances, MMS
                                           will notify you and
                                           give you an
                                           opportunity to
                                           provide written
                                           information
                                           justifying your
                                           value. * * *
                                          (2) MMS may require
                                           you to certify that
                                           your arm's-length
                                           contract provisions
                                           include all of the
                                           consideration the
                                           buyer pays, either
                                           directly or
                                           indirectly, for the
                                           gas, residue gas, or
                                           gas plant product.
                                          (d) Supporting data.
                                          (2) You must make all
                                           such data available
                                           upon request to the
                                           authorized MMS or
                                           Indian
                                           representatives, to
                                           the Office of the
                                           Inspector General of
                                           the Department, or
                                           other authorized
                                           persons. * * *
----------------------------------------------------------------------------------------------------------------

[[Page 45061]]

 
206.174(d)..............................  (d) Supporting data.    Burden covered under OMB Control Number 1010-
                                           If you determine the   0140.
                                           value of production
                                           under paragraph (c)
                                           of this section, you
                                           must retain all data
                                           relevant to
                                           determination of
                                           royalty value.
----------------------------------------------------------------------------------------------------------------
206.174(f)..............................  (f) Value guidance.                 40               1              40
                                           You may ask MMS for
                                           guidance in
                                           determining value.
                                           You may propose a
                                           valuation method to
                                           MMS. Submit all
                                           available data
                                           related to your
                                           proposal and any
                                           additional
                                           information MMS deems
                                           necessary. * * *
----------------------------------------------------------------------------------------------------------------
206.175(d)(4)...........................  How do I determine                  20               1              20
                                           quantities and
                                           qualities of
                                           production for
                                           computing royalties?
                                          (d)(4) You may request
                                           MMS approval of other
                                           methods for
                                           determining the
                                           quantity of residue
                                           gas and gas plant
                                           products allocable to
                                           each lease. * * *
----------------------------------------------------------------------------------------------------------------
206.176(b)..............................  How do I perform        Burden covered under Sec.   206.173(a)(1).
                                           accounting for
                                           comparison?
                                          (b) If you are
                                           required to account
                                           for comparison, you
                                           may elect to use the
                                           alternative dual
                                           accounting
                                           methodology provided
                                           for in Sec.   206.173
                                           instead of the
                                           provisions in
                                           paragraph (a) of this
                                           section.
----------------------------------------------------------------------------------------------------------------
206.176(c)..............................  (c) * * * If you do     Burden covered under Sec.   206.172(b)(1)(ii).
                                           not perform dual
                                           accounting, you must
                                           certify to MMS that
                                           gas flows into such a
                                           pipeline before it is
                                           processed.
----------------------------------------------------------------------------------------------------------------
                                            Transportation Allowances
----------------------------------------------------------------------------------------------------------------
206.177(c)(2) and (c)(3)................  What general                         4               1               4
                                           requirements
                                           regarding
                                           transportation
                                           allowances apply to
                                           me?
                                          (c)(2) If you ask MMS,
                                           MMS may approve a
                                           transportation
                                           allowance deduction
                                           in excess of the
                                           limitation in
                                           paragraph (c)(1) of
                                           this section. * * *
                                          (3) Your application
                                           for exception (using
                                           Form MMS-4393,
                                           Request to Exceed
                                           Regulatory Allowance
                                           Limitation) must
                                           contain all relevant
                                           and supporting
                                           documentation
                                           necessary for MMS to
                                           make a determination.
----------------------------------------------------------------------------------------------------------------
206.178(a)(1)(i)........................  How do I determine a                 1              25              25
                                           transportation
                                           allowance?
                                          (a) Determining a
                                           transportation
                                           allowance under an
                                           arm's-length
                                           contract.
                                          (1)(i) * * * You are
                                           required to submit to
                                           MMS a copy of your
                                           arm's-length
                                           transportation
                                           contract(s) and all
                                           subsequent amendments
                                           to the contract(s)
                                           within 2 months of
                                           the date MMS receives
                                           your report which
                                           claims the allowance
                                           on the Form MMS-2014.
----------------------------------------------------------------------------------------------------------------
206.178(a)(1)(iii)......................  (a) Determining a       AUDIT PROCESS. See note.
                                           transportation
                                           allowance under an
                                           arm's-length
                                           contract.
                                          (1)(iii) If MMS
                                           determines that the
                                           consideration paid
                                           under an arm's-length
                                           transportation
                                           contract does not
                                           reflect the value of
                                           the transportation
                                           because of misconduct
                                           by or between the
                                           contracting parties *
                                           * * In these
                                           circumstances, MMS
                                           will notify you and
                                           give you an
                                           opportunity to
                                           provide written
                                           information
                                           justifying your
                                           transportation costs.
----------------------------------------------------------------------------------------------------------------
206.178(a)(2)(i) and (ii)...............  (a) Determining a                   20               1              20
                                           transportation
                                           allowance under an
                                           arm's-length
                                           contract.
                                          (2)(i) * * * you
                                           cannot take an
                                           allowance for the
                                           costs of transporting
                                           lease production that
                                           is not royalty
                                           bearing without MMS
                                           approval, or without
                                           lessor approval on
                                           tribal leases.
                                          (ii) As an alternative
                                           to paragraph
                                           (a)(2)(i) of this
                                           section, you may
                                           propose to MMS a cost
                                           allocation method
                                           based on the values
                                           of the products
                                           transported. * * *
----------------------------------------------------------------------------------------------------------------

[[Page 45062]]

 
206.178(a)(3)(i) and (ii)...............  (a) Determining a                   40               1              40
                                           transportation
                                           allowance under an
                                           arm's-length
                                           contract.
                                          (3)(i) If your arm's-
                                           length transportation
                                           contract includes
                                           both gaseous and
                                           liquid products and
                                           the transportation
                                           costs attributable to
                                           each cannot be
                                           determined from the
                                           contract, you must
                                           propose an allocation
                                           procedure to MMS. * *
                                           *
                                          (ii) You are required
                                           to submit all
                                           relevant data to
                                           support your
                                           allocation proposal.
                                           * * *
----------------------------------------------------------------------------------------------------------------
206.178(b)(1)(ii).......................  (b) Determining a                   15               3              45
                                           transportation
                                           allowance under a non-
                                           arm's-length contract
                                           or no contract.
                                          (1)(ii) * * * You must
                                           submit the actual
                                           cost information to
                                           support the allowance
                                           to MMS on Form MMS-
                                           4295, Gas
                                           Transportation
                                           Allowance Report,
                                           within 3 months after
                                           the end of the 12-
                                           month period to which
                                           the allowance
                                           applies. * * *
----------------------------------------------------------------------------------------------------------------
206.178(b)(2)(iv).......................  (b) Determining a                   20               1              20
                                           transportation
                                           allowance under a non-
                                           arm's-length contract
                                           or no contract.
                                          (2)(iv) You may use
                                           either depreciation
                                           with a return on
                                           undepreciated capital
                                           investment or a
                                           return on depreciable
                                           capital investment. *
                                           * * you may not later
                                           elect to change to
                                           the other alternative
                                           without MMS approval.
----------------------------------------------------------------------------------------------------------------
206.178(b)(2)(iv)(A)....................  (b) Determining a                   20               1              20
                                           transportation
                                           allowance under a non-
                                           arm's-length contract
                                           or no contract.
                                          (2)(iv)(A) * * * Once
                                           you make an election,
                                           you may not change
                                           methods without MMS
                                           approval. * * *
----------------------------------------------------------------------------------------------------------------
206.178(b)(3)(i)........................  (b) Determining a                   40               1              40
                                           transportation
                                           allowance under a non-
                                           arm's-length contract
                                           or no contract.
                                          (3)(i) * * * Except as
                                           provided in this
                                           paragraph, you may
                                           not take an allowance
                                           for transporting a
                                           product that is not
                                           royalty bearing
                                           without MMS approval.
----------------------------------------------------------------------------------------------------------------
206.178(b)(3)(ii).......................  (b) Determining a                   20               1              20
                                           transportation
                                           allowance under a non-
                                           arm's-length contract
                                           or no contract.
                                          (3)(ii) As an
                                           alternative to the
                                           requirements of
                                           paragraph (b)(3)(i)
                                           of this section, you
                                           may propose to MMS a
                                           cost allocation
                                           method based on the
                                           values of the
                                           products transported.
                                           * * *
----------------------------------------------------------------------------------------------------------------
206.178(b)(5)...........................  (b) Determining a                   40               1              40
                                           transportation
                                           allowance under a non-
                                           arm's-length contract
                                           or no contract.
                                          (5) If you transport
                                           both gaseous and
                                           liquid products
                                           through the same
                                           transportation
                                           system, you must
                                           propose a cost
                                           allocation procedure
                                           to MMS. * * * You are
                                           required to submit
                                           all relevant data to
                                           support your
                                           proposal. * * *
----------------------------------------------------------------------------------------------------------------
206.178(d)(1)...........................  (d) Reporting your      AUDIT PROCESS. See note.
                                           transportation
                                           allowance.
                                          (1) If MMS requests,
                                           you must submit all
                                           data used to
                                           determine your
                                           transportation
                                           allowance * * *
----------------------------------------------------------------------------------------------------------------
206.178(d)(2), (e), and (f)(1)..........  (d) Reporting your      Burden covered under OMB Control Number 1010-
                                           transportation         0140. Burden covered under Sec.   210.52.
                                           allowance.
                                          (2) You must report
                                           transportation
                                           allowances as a
                                           separate entry on
                                           Form MMS-2014. * * *
                                          (e) Adjusting
                                           incorrect allowances.
                                           If for any month the
                                           transportation
                                           allowance you are
                                           entitled to is less
                                           than the amount you
                                           took on Form MMS-
                                           2014, you are
                                           required to report
                                           and pay additional
                                           royalties due, plus
                                           interest computed
                                           under 30 CFR 218.54
                                           from the first day of
                                           the first month you
                                           deducted the improper
                                           transportation
                                           allowance until the
                                           date you pay the
                                           royalties due. * * *
                                          (f) Determining
                                           allowable costs for
                                           transportation
                                           allowances. * * *
                                          (1) Firm demand
                                           charges paid to
                                           pipelines. * * * You
                                           must modify the Form
                                           MMS-2014 by the
                                           amount received or
                                           credited for the
                                           affected reporting
                                           period.
----------------------------------------------------------------------------------------------------------------

[[Page 45063]]

 
                                              Processing Allowances
----------------------------------------------------------------------------------------------------------------
206.180(a)(1)(i)........................  How do I determine an                1              15              15
                                           actual processing
                                           allowance?
                                          (a) Determining a
                                           processing allowance
                                           if you have an arm's-
                                           length processing
                                           contract.
                                          (1)(i) * * * You have
                                           the burden of
                                           demonstrating that
                                           your contract is
                                           arm's-length. You are
                                           required to submit to
                                           MMS a copy of your
                                           arm's-length
                                           contract(s) and all
                                           subsequent amendments
                                           to the contract(s)
                                           within 2 months of
                                           the date MMS receives
                                           your first report
                                           that deducts the
                                           allowance on the Form
                                           MMS-2014.
----------------------------------------------------------------------------------------------------------------
206.180(a)(1)(iii)......................  (a) Determining a       AUDIT PROCESS. See note.
                                           processing allowance
                                           if you have an arm's-
                                           length processing
                                           contract.
                                          (1)(iii) If MMS
                                           determines that the
                                           consideration paid
                                           under an arm's-length
                                           processing contract
                                           does not reflect the
                                           value of the
                                           processing because of
                                           misconduct by or
                                           between the
                                           contracting parties *
                                           * * In these
                                           circumstances, MMS
                                           will notify you and
                                           give you an
                                           opportunity to
                                           provide written
                                           information
                                           justifying your
                                           processing costs.
----------------------------------------------------------------------------------------------------------------
206.180(a)(3)...........................  (a) Determining a                   40               1              40
                                           processing allowance
                                           if you have an arm's-
                                           length processing
                                           contract.
                                          (3) If your arm's-
                                           length processing
                                           contract includes
                                           more than one gas
                                           plant product and the
                                           processing costs
                                           attributable to each
                                           product cannot be
                                           determined from the
                                           contract, you must
                                           propose an allocation
                                           procedure to MMS. * *
                                           * You are required to
                                           submit all relevant
                                           data to support your
                                           proposal. * * *
----------------------------------------------------------------------------------------------------------------
206.180(b)(1)(ii).......................  (b) Determining a                   20               5             100
                                           processing allowance
                                           if you have a non-
                                           arm's-length contract
                                           or no contract.
                                          (1)(ii) * * * You must
                                           submit the actual
                                           cost information to
                                           support the allowance
                                           to MMS on Form MMS-
                                           4109, Gas Processing
                                           Allowance Summary
                                           Report, within 3
                                           months after the end
                                           of the 12-month
                                           period for which the
                                           allowance applies. *
                                           * *
----------------------------------------------------------------------------------------------------------------
206.180(b)(2)(iv).......................  (b) Determining a                   20               1              20
                                           processing allowance
                                           if you have a non-
                                           arm's-length contract
                                           or no contract.
                                          (2)(iv) You may use
                                           either depreciation
                                           with a return on
                                           undepreciable capital
                                           investment or a
                                           return on depreciable
                                           capital investment.*
                                           * * you may not later
                                           elect to change to
                                           the other alternative
                                           without MMS approval.
----------------------------------------------------------------------------------------------------------------
206.180(b)(2)(iv)(A)....................  (b) Determining a                   20               1              20
                                           processing allowance
                                           if you have a non-
                                           arm's-length contract
                                           or no contract.
                                          (2)(iv)(A) * * * Once
                                           you make an election,
                                           you may not change
                                           methods without MMS
                                           approval. * * *
----------------------------------------------------------------------------------------------------------------
206.180(b)(3)...........................  (b) Determining a                   20               1              20
                                           processing allowance
                                           if you have a non-
                                           arm's-length contract
                                           or no contract.
                                          (3) Your processing
                                           allowance under this
                                           paragraph (b) must be
                                           determined based upon
                                           a calendar year or
                                           other period if you
                                           and MMS agree to an
                                           alternative.
----------------------------------------------------------------------------------------------------------------
206.180(c)(1)...........................  (c) Reporting your      AUDIT PROCESS. See note.
                                           processing allowance.
                                          (1) If MMS requests,
                                           you must submit all
                                           data used to
                                           determine your
                                           processing allowance.
                                           * * *
----------------------------------------------------------------------------------------------------------------

[[Page 45064]]

 
206.180(c)(2) and (d)...................  (c) Reporting your      Burden covered under OMB Control Number 1010-
                                           processing allowance.  0140. Burden covered under Sec.   210.52.
                                          (2) You must report
                                           gas processing
                                           allowances as a
                                           separate entry on the
                                           Form MMS-2014. * * *
                                          (d) Adjusting
                                           incorrect processing
                                           allowances. If for
                                           any month the gas
                                           processing allowance
                                           you are entitled to
                                           is less than the
                                           amount you took on
                                           Form MMS-2014, you
                                           are required to pay
                                           additional royalties,
                                           plus interest
                                           computed under 30 CFR
                                           218.54 from the first
                                           day of the first
                                           month you deducted a
                                           processing allowance
                                           until the date you
                                           pay the royalties
                                           due. * * *
----------------------------------------------------------------------------------------------------------------
206.181(c)..............................  How do I establish                  40               1              40
                                           processing costs for
                                           dual accounting
                                           purposes when I do
                                           not process the gas?
                                          (c) A proposed
                                           comparable processing
                                           fee submitted to
                                           either the tribe and
                                           MMS (for tribal
                                           leases) or MMS (for
                                           allotted leases) with
                                           your supporting
                                           documentation
                                           submitted to MMS. If
                                           MMS does not take
                                           action on your
                                           proposal within 120
                                           days, the proposal
                                           will be deemed to be
                                           denied and subject to
                                           appeal to the MMS
                                           Director under 30 CFR
                                           part 290.
----------------------------------------------------------------------------------------------------------------
                   207--SALES AGREEMENTS OR CONTRACTS GOVERNING THE DISPOSAL OF LEASE PRODUCTS
                                          Subpart A--General Provisions
----------------------------------------------------------------------------------------------------------------
207.4(b)................................  Contracts made          AUDIT PROCESS. See note.
                                           pursuant to old form
                                           leases.
                                          (b) The stipulation,
                                           the substance of
                                           which must be
                                           included in the
                                           contract, or be made
                                           the subject matter of
                                           a separate instrument
                                           properly identifying
                                           the leases affected
                                           thereby, is as
                                           follows: * * *
----------------------------------------------------------------------------------------------------------------
207.5...................................  Contract and sales      AUDIT PROCESS. See note.
                                           agreement retention.
                                          Copies of all sales
                                           contracts, posted
                                           price bulletins,
                                           etc., and copies of
                                           all agreements, other
                                           contracts, or other
                                           documents which are
                                           relevant to the
                                           valuation of
                                           production are to be
                                           maintained by the
                                           lessee and made
                                           available upon
                                           request during normal
                                           working hours to
                                           authorized MMS, State
                                           or Indian
                                           representatives,
                                           other MMS or BLM
                                           officials, auditors
                                           of the General
                                           Accounting Office, or
                                           other persons
                                           authorized to receive
                                           such documents, or
                                           shall be submitted to
                                           MMS within a
                                           reasonable period of
                                           time, as determined
                                           by MMS. Any oral
                                           sales arrangement
                                           negotiated by the
                                           lessee must be placed
                                           in written form and
                                           retained by the
                                           lessee. Records shall
                                           be retained in
                                           accordance with 30
                                           CFR part 212.
----------------------------------------------------------------------------------------------------------------
    Total Burden................................................................             140           1,074
----------------------------------------------------------------------------------------------------------------
Note: AUDIT PROCESS--The Office of Regulatory Affairs determined that the audit process is exempt from the
  Paperwork Reduction Act of 1995 because MMS staff asks non-standard questions to resolve exceptions.

    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.
    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.

[[Page 45065]]

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 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 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 at http://www.mrm.mms.gov/Laws_R_D/FRNotices/FRInfColl.htm. We also will make copies of the comments available for 
public view, 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, 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 view 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: July 21, 2008.
Richard J. Adamski,
Acting Associate Director for Minerals Revenue Management.
[FR Doc. E8-17730 Filed 7-31-08; 8:45 am]
BILLING CODE 4310-MR-P