[Federal Register Volume 74, Number 76 (Wednesday, April 22, 2009)]
[Notices]
[Pages 18393-18395]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-9194]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service

[Docket No. MMS-2009-OMM-0004]


MMS Information Collection Activity: 1010-0071, Relief or 
Reduction in Royalty Rates: Proposed Collection; Comment Request

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Notice of extension of an information collection (1010-0071).

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SUMMARY: To comply with the Paperwork Reduction Act of 1995 (PRA), MMS 
is inviting comments on a collection of information that we will submit 
to the Office of Management and Budget (OMB) for review and approval. 
The information collection request (ICR) concerns the paperwork 
requirements in the regulations under 30 CFR Part 203, Relief or 
Reduction in Royalty Rates.

DATES: Submit written comments by June 22, 2009.

FOR FURTHER INFORMATION CONTACT: Cheryl Blundon, Regulations and 
Standards Branch at (703) 787-1607. You may also contact Cheryl Blundon 
to obtain a copy, at no cost, of the regulation that requires the 
subject collection of information.

ADDRESSES: You may submit comments by either of the following methods 
listed below.
     Electronically: go to http://www.regulations.gov. Under 
the tab ``More Search Options,'' click Advanced Docket Search, then 
select ``Minerals Management Service'' from the agency drop-down menu, 
then click ``submit.'' In the Docket ID column, select MMS-2009-OMM-
0004 to submit public comments and to view supporting and related 
materials available for this rulemaking. 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. The 
MMS will post all comments.
     Mail or hand-carry comments to the Department of the 
Interior; Minerals Management Service; Attention: Cheryl Blundon; 381 
Elden Street, MS-4024; Herndon, Virginia 20170-4817. Please reference 
``Information Collection 1010-0071'' in your subject line and mark your 
message for return receipt. Include your name and return address in 
your message text.

SUPPLEMENTARY INFORMATION: 
    Title: 30 CFR Part 203, Relief or Reduction in Royalty Rates.
    OMB Control Number: 1010-0071.
    Abstract: The Outer Continental Shelf (OCS) Lands Act, as amended 
by Public Law 104-58, Deep Water Royalty Relief Act (DWRRA), gives the 
Secretary of the Interior (Secretary) the authority to reduce or 
eliminate royalty or any net profit share specified in OCS oil and gas 
leases to promote increased production. The DWRRA also authorized the 
Secretary to suspend royalties when necessary to promote development or 
recovery of marginal resources on producing or non-producing leases in 
the Gulf of Mexico (GOM) west of 87 degrees, 30 minutes West longitude.
    Section 302 of the DWRRA provides that new production from a lease 
in existence on November 28, 1995, in a water depth of at least 200 
meters, and in the GOM west of 87 degrees, 30 minutes West longitude 
qualifies for royalty suspension in certain situations. To grant a 
royalty suspension, the Secretary must determine that the new 
production or development would not be economic without royalty relief. 
The Secretary must then determine the volume of production on which no 
royalty would be due in order to make the new production from the lease 
economically viable. This determination must be done on a case-by-case 
basis. Production from leases in the same water depth and area issued 
after November 28, 2000, also can qualify for royalty suspension in 
addition to any that may be included in their lease terms.
    In addition, the Independent Offices Appropriations Act (31 U.S.C. 
9701), the Omnibus Appropriations Bill (Pub. L. 104-133, 110 Stat. 
1321, April 26, 1996), and Office of Management and Budget (OMB) 
Circular A-25, authorize Federal agencies to recover the full cost

[[Page 18394]]

of services that confer special benefits. Under the Department of the 
Interior's (DOI) implementing policy, the Minerals Management Service 
(MMS) is required to charge the full cost for services that provide 
special benefits or privileges to an identifiable non-Federal recipient 
above and beyond those which accrue to the public at large.
    Regulations at 30 CFR part 203 implement these statutes and policy 
and require respondents to pay a fee to request royalty relief. Section 
30 CFR 203.3 states that, ``We will specify the necessary fees for each 
of the types of royalty-relief applications and possible MMS audits in 
a Notice to Lessees. We will periodically update the fees to reflect 
changes in costs as well as provide other information necessary to 
administer royalty relief.''
    The MMS uses the information to make decisions on the economic 
viability of leases requesting a suspension or elimination of royalty 
or net profit share. These decisions have enormous monetary impacts to 
both the lessee and the Federal Government. Royalty relief can lead to 
increased production of natural gas and oil, creating profits for 
lessees and royalty and tax revenues for the government that they might 
not otherwise receive. We could not make an informed decision without 
the collection of information required by 30 CFR part 203.
    We will protect information from respondents considered proprietary 
under the Freedom of Information Act (5 U.S.C. 552) and its 
implementing regulations (43 CFR part 2) and 30 CFR 203.63(b) and 30 
CFR 250.197. No items of a sensitive nature are collected.
    Responses are mandatory or are required to obtain or retain a 
benefit.
    Frequency: On occasion.
    Estimated Number and Description of Respondents: Approximately 130 
Federal OCS oil and gas lessees.
    Estimated Reporting and Recordkeeping ``Hour'' Burden: The 
currently approved annual reporting burden for this collection is 4,721 
hours. The following chart details the individual components and 
respective hour burden estimates of this ICR. In calculating the 
burdens, we assumed that respondents perform certain requirements in 
the normal course of their activities. We consider these to be usual 
and customary and took that into account in estimating the burden.

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                                   Reporting or recordkeeping requirement 30
       Citation 30 CFR 203                        CFR Part 203                   Hour burden  application fees
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2(b); 3; 4; 70..................  These sections contain general references    0.
                                   to submitting reports, applications,
                                   requests, copies, demonstrating
                                   qualifications, for MMS approval--burdens
                                   covered under specific requirements.
31(c)...........................  Request a refund of or recoup royalties      1.
                                   from qualified ultra-deep wells.
35(d); 44(e)....................  Request to extend the deadline for           1.
                                   beginning production with required
                                   supporting documentation.
35(a); 44(a); 47(a).............  Notify MMS of intent to begin drilling.....  1.
35(c), (d); 44(b), (d), (e).....  Notify MMS that production has begun,        2.
                                   request confirmation of the size of RSV,
                                   provide supporting documentation.
41(d)...........................  Request a refund of or recoup royalties      1.
                                   from qualified wells >200 meters but <400
                                   meters.
46..............................  Provide data from well to confirm and        8.
                                   attest well drilled was an unsuccessful
                                   certified well with supporting
                                   documentation and request supplement.
49(b)...........................  Notify MMS of decision to exercise option    0.
                                   to replace one set of deep gas royalty
                                   suspension terms for another set of such
                                   terms.
                                  NOTE: The MMS SOL requires that the
                                   regulation stay for legacy purposes only.
                                   Last time any respondent could use was
                                   2004.
51; 83; 84......................  Application--leases that generate earnings   100.
                                   that cannot sustain continued production    Application = $8,000.*
                                   (end-of-life lease) and required
                                   supporting documentation.
                                                                               Audit = $12,500.
52..............................  Demonstrate ability to qualify for royalty   1.
                                   relief or to re-qualify.
55..............................  Renounce relief arrangement (end-of-life)    1.
                                   (seldom, if ever will be used; minimal
                                   burden to prepare letter).
61; 62; 64; 65; 71; 83; 85-89...  Application--leases in designated areas of   2,000.
                                   GOM deep water acquired in lease sale       Application = $19,500.
                                   before 11/28/95 or after 11/28/00 and are
                                   producing (deep water expansion project)
                                   and required supporting documentation.
61; 62; 64; 65; 203.71; 203.83;   Application--leases in designated areas of   2,000.
 203.85-89.                        deep water GOM, acquired in lease sale      Application = $34,000.*
                                   before 11/28/95 or after 11/28/00 that      Audit = $37,500.
                                   have not produced (pre-act or post-2000
                                   deep water leases) and required supporting
                                   documentation.
61; 62; 64; 65; 71; 83; 85-89...  Application--preview assessment (seldom if   Application = $34,000.
                                   ever will be used as applicants generally
                                   opt for binding determination by MMS
                                   instead) and required supporting
                                   documentation.
70; 81; 90; 91..................  Submit fabricator's confirmation report;     20.
                                   extension justification.
70; 81; 90; 92..................  Submit post-production development report;   50.
                                   extension justification.
74; 75..........................  Redetermination and required supporting      500.
                                   documentation.
                                                                               Application = $16,000.*
77..............................  Renounce relief arrangement (deep water)     1.
                                   (seldom, if ever will be used; minimal
                                   burden to prepare letter).
79(c)...........................  Request extension of deadline to start       2.
                                   construction.
80..............................  Application--apart from formal programs for  250.
                                   royalty relief for a marginal producing     Application = $8,000.**
                                   lease (Special Case Relief) and required
                                   supporting documentation.
                                                                               Audit = $10,000.
80..............................  Application--apart from formal programs for  GOM--1,000.
                                   royalty relief for marginal expansion       Application = $19,500.**
                                   project or marginal non-producing lease     Audit = $20,000.
                                   (Special Case Relief) and required
                                   supporting documentation.
                                                                                POCS--40.
                                                                               Application = $6,500.***
81; 83-90.......................  Required reports; extension justification..  Burden included with
                                                                                applications.

[[Page 18395]]

 
81(d)...........................  Retain supporting cost records for post-     8.
                                   production development/fabrication reports
                                   (records retained as usual/customary
                                   business practice; minimal burden to make
                                   available at MMS request).
83..............................  Application--short form to add or assign     40
                                   pre-Act lease and required supporting       Application = $1,000.
                                   documentation.
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* CPA certification expense burden also imposed on applicant.
** These applications currently do not have a set fee since they are done on a case-by-case basis. In the past
  11 years, three unique applications have been submitted and the respondents were charged approximately $8,000
  per application, and $19,500 respectively.

    Note: Applications include numerous items such as: transmittal 
letters, letters of request, modifications to applications, 
reapplications, etc.
    Estimated Reporting and Recordkeeping ``Non-Hour Cost'' Burden: 
There are two non-hour costs associated with this information 
collection. The currently approved non-hour cost burden is $280,670. 
This estimate is based on:
    (a) Application and audit fees. The total annual estimated cost 
burden for these fees is $145,670 (refer to burden chart).
    (b) Cost of reports prepared by independent certified public 
accountants. Under Sec.  203.81, a report prepared by an independent 
certified public accountant (CPA) must accompany the application and 
post-production report (expansion project, short form, and preview 
assessment applications are excluded). The OCS Lands Act applications 
will require this report only once; the DWRRA applications will require 
this report at two stages--with the application and post-production 
development report for successful applicants. We estimate approximately 
three submissions, during the information collection extension, at an 
average cost of $45,000 per report, for a total estimated annual cost 
burden of $135,000. We have not identified any other non-hour cost 
burdens for this collection.
    Public Disclosure Statement: The PRA (44 U.S.C. 3501, et seq.) 
provides that an agency may not conduct or sponsor a collection of 
information unless it displays a currently valid OMB control number. 
Until OMB approves a collection of information, you are not obligated 
to respond.
    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.
    Agencies must also estimate the ``non-hour cost'' burdens to 
respondents or recordkeepers resulting from the collection of 
information. Therefore, if you have costs to generate, maintain, and 
disclose this information, you should comment and provide your total 
capital and startup cost components or annual operation, maintenance, 
and purchase of service components. You should describe the methods you 
use to estimate major cost factors, including system and technology 
acquisition, expected useful life of capital equipment, discount 
rate(s), and the period over which you incur costs. Capital and startup 
costs include, among other items, computers and software you purchase 
to prepare for collecting information, monitoring, and record storage 
facilities. You should not include estimates for 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 submission for OMB approval. As a result of your comments, we 
will make any necessary adjustments to the burden in our submission to 
OMB.
    Public Comment Procedures: Before including your address, phone 
number, e-mail address, or other personal identifying information in 
your comment, you should be aware that your entire comment--including 
your personal identifying information--may be made publicly available 
at any time. While you can ask us in your comment to withhold your 
personal identifying information from public review, we cannot 
guarantee that we will be able to do so.
    MMS Information Collection Clearance Officer: Arlene Bajusz (202) 
208-7744.

    Dated: April 10, 2009.
E.P. Danenberger,
Chief, Office of Offshore Regulatory Programs.
[FR Doc. E9-9194 Filed 4-21-09; 8:45 am]
BILLING CODE 4310-MR-P