[Federal Register Volume 80, Number 50 (Monday, March 16, 2015)]
[Notices]
[Pages 13619-13629]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-05854]


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DEPARTMENT OF THE INTERIOR

[Docket No. ONRR-2011-0021; DS63610000 DR2PS0000.CH7000 145D0102R2]


Office of Natural Resources Revenue; Agency Information 
Collection Activities: 30 CFR Parts 1202, 1206, and 1207, Indian Oil & 
Gas Valuation--Comment Request

AGENCY: Office of Natural Resources Revenue (ONRR), Interior.

ACTION: Notice of extension.

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SUMMARY: To comply with the Paperwork Reduction Act of 1995 (PRA), ONRR 
is inviting comments on a collection of information requests that we 
will submit to the Office of Management and Budget (OMB) for review and 
approval. This Information Collection Request (ICR) covers the 
paperwork requirements in the regulations under title 30, Code of 
Federal Regulations (CFR), parts 1202, 1206, and 1207. Also, there are 
five forms associated with this information collection.

DATES: Submit written comments on or before May 15, 2015.

ADDRESSES: You may submit comments on this ICR to ONRR by using one of 
the following three methods (please reference ``ICR 1012-0002'' in your 
comments):
    1. Electronically go to http://www.regulations.gov. In the entry 
titled ``Enter Keyword or ID,'' enter ``ONRR-2011-0021'' and then click 
``Search.''

[[Page 13620]]

Follow the instructions to submit public comments. ONRR will post all 
comments.
    2. Mail comments to Mr. Luis Aguilar, Regulatory Specialist, ONRR, 
P.O. Box 25165, MS 61030A, Denver, Colorado 80225-0165.
    3. Hand-carry or mail comments, using an overnight courier service, 
to ONRR. Our courier address is Building 85, Room A-614, Denver Federal 
Center, West 6th Ave. and Kipling St., Denver, Colorado 80225.

FOR FURTHER INFORMATION CONTACT: For any questions, contact Mr. Luis 
Aguilar, telephone (303) 231-3418, or email at [email protected]. 
You may also contact Mr. Aguilar to obtain copies, at no cost, of (1) 
the ICR, (2) any associated forms, and (3) the regulations that require 
us to collect the information.

SUPPLEMENTARY INFORMATION: 

I. Abstract

    The Secretary of the United States Department of the Interior is 
responsible for collecting royalties from lessees who produce minerals 
from leased Federal and Indian lands and the Outer Continental Shelf 
(OCS). The Secretary's responsibility, under various laws, is to manage 
mineral resource production from Federal and Indian lands and the OCS, 
collect the royalties and other mineral revenues due, and distribute 
the funds collected under those laws. ONRR performs the royalty 
management functions for the Secretary.
    We have posted those laws pertaining to mineral leases on Federal 
and Indian lands and the OCS at http://www.onrr.gov/Laws_R_D/PubLaws/default.htm.
    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.

Indian Oil

    Regulations at 30 CFR part 1206, subpart B, govern the valuation 
for royalty purposes of all oil produced from Indian oil and gas leases 
(tribal and allotted), except leases on the Osage Indian Reservation, 
and are consistent with mineral leasing laws, other applicable laws, 
and lease terms. Generally, the regulations provide that lessees 
determine the value of oil based upon the higher of (1) the gross 
proceeds under an arm's-length contract; or (2) major portion analysis. 
The value determined by the lessee may be eligible for a transportation 
allowance.
    From information collected on Form ONRR-4110, Oil Transportation 
Allowance Report, ONRR and tribal audit personnel evaluate (1) whether 
lessee-reported transportation allowances are within regulatory 
allowance limitations and calculated in accordance with applicable 
regulations; and (2) whether the lessees reported and paid the proper 
amount of royalties.

Indian Gas

    Regulations at 30 CFR part 1206, subpart E, govern the valuation 
for royalty purposes of natural gas produced from Indian oil and gas 
leases (tribal and allotted). 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 1206.176 or alternative dual accounting as defined in 30 CFR 
1206.173. Lessees use Form ONRR-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 ONRR-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 ONRR 
compliance efforts.
    From information collected on Form ONRR-4295, Gas Transportation 
Allowance Report, ONRR and tribal audit personnel evaluate (1) whether 
lessee-reported transportation allowances are within regulatory 
allowance limitations and calculated in accordance with applicable 
regulations; and (2) whether the lessees reported and paid the proper 
amount of royalties.
    From information collected on Form ONRR-4109, Gas Processing 
Allowance Summary Report, ONRR and tribal audit personnel evaluate (1) 
whether lessee-reported processing allowances are within regulatory 
allowance limitations and calculated in accordance with applicable 
regulations; and (2) whether the lessees reported and paid the proper 
amount of royalties.

Indian Oil and Gas

    Form ONRR-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 1012-0005, 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 (1) submit a letter to ONRR explaining 
why a higher allowance limit is necessary; and (2) provide supporting 
documentation, including a completed Form ONRR-4393. This form provides 
ONRR with the data necessary to make a decision whether to approve or 
deny the request and track deductions on royalty reports.

OMB Approval

    ONRR will request OMB approval to continue to collect this 
information. If ONRR does not collect this information, this would 
limit the Secretary's ability to discharge fiduciary duties and may 
also result in the inability to confirm the accurate royalty value. 
ONRR protects the proprietary information that we receive, and we do 
not collect items of a sensitive nature.
    ONRR requires lessees to respond to this ICR because the 
information collected is essential in order to determine when net 
profit share payments are due and to ensure that lessees properly value 
and pay royalties or net profit share payments. The requirement to 
respond is mandatory for Form ONRR-4410, Accounting for Comparison 
[Dual Accounting], and Form ONRR-4411, Safety Net Report, under certain 
circumstances. And, the lessees are required to submit Forms ONRR-4109, 
ONRR-4110, and ONRR-4295 in order to obtain a benefit.

II. Data

    Title: 30 CFR parts 1202, 1206, and 1207, Indian Oil and Gas 
Valuation.
    OMB Control Number: 1012-0002.
    Bureau Form Number: Forms ONRR-4109, ONRR-4110, ONRR-4295, ONRR-
4410, and ONRR-4411.
    Frequency of Response: Annually and on occasion.
    Estimated Number and Description of Respondents: 148 Indian 
lessees.
    Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 2,269 
hours.
    We have not included in our estimates certain requirements 
performed in the normal course of

[[Page 13621]]

business and considered usual and customary. The following chart shows 
the estimated burden hours by CFR section and paragraph:

                                   Respondents' Estimated Annual Burden Hours
----------------------------------------------------------------------------------------------------------------
                                                                                  Average number
            30 CFR                 Reporting and recordkeeping      Hour burden      of annual     Annual burden
                                           requirement                               responses         hours
----------------------------------------------------------------------------------------------------------------
                                              Part 1202--ROYALTIES
                                        Subpart C--Federal and Indian Oil
----------------------------------------------------------------------------------------------------------------
1202.101......................  Standards for reporting and        Burden covered under OMB Control Number 1012-
                                 paying royalties.                   0004 (expires 12/31/2012). Burden covered
                                Oil volumes are to be reported                 under Sec.   1210.52.
                                 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
----------------------------------------------------------------------------------------------------------------
1202.551(b)...................  How do I determine the volume of   Burden covered under OMB Control Number 1012-
                                 production for which I must pay    0004. Burden covered under Sec.   1210.52.
                                 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. . . ..
----------------------------------------------------------------------------------------------------------------
1202.551(c)...................  (c) You and all other persons                  1               1               1
                                 paying royalties on the lease
                                 may ask ONRR for permission. .
                                 . . to report entitlements . .
                                 .
----------------------------------------------------------------------------------------------------------------
1202.558(a) and (b)...........  What standards do I use to         Burden covered under OMB Control Number 1012-
                                 report and pay royalties on        0004. Burden covered under Sec.   1210.52.
                                 gas?.
                                (a) You must report gas volumes
                                 as follows: . . ..
                                (b) You must report residue gas
                                 and gas plant product volumes
                                 as follows: . . ..
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                                          Part 1206--PRODUCT VALUATION
                                              Subpart B--Indian Oil
----------------------------------------------------------------------------------------------------------------
1206.56(b)(2).................  Transportation allowances--                    4               1               4
                                 general.
                                (b)(2) Upon request of a lessee,
                                 ONRR 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 ONRR-
                                 4393, Request to Exceed
                                 Regulatory Allowance
                                 Limitation) must contain all
                                 relevant and supporting
                                 documentation necessary for
                                 ONRR to make a determination. .
                                 . ..
----------------------------------------------------------------------------------------------------------------
1206.57(a)(1)(i)..............  Determination of transportation              AUDIT PROCESS. See note.
                                 allowances.
                                (a) Arm's-length transportation
                                 contracts..
                                (1)(i) . . . The lessee shall
                                 have the burden of
                                 demonstrating that its contract
                                 is arm's-length..
----------------------------------------------------------------------------------------------------------------
1206.57(a)(1)(i)..............  (a) Arm's-length transportation    Burden covered under Sec.   1206.57(c)(1)(i)
                                 contracts.                                         and (iii).
                                (1)(i) . . . Before any
                                 deduction may be taken, the
                                 lessee must submit a completed
                                 page one of Form ONRR-4110 (and
                                 Schedule 1), Oil Transportation
                                 Allowance Report . . ..
----------------------------------------------------------------------------------------------------------------
1206.57(a)(1)(iii)............  (a) Arm's-length transportation              AUDIT PROCESS. See note.
                                 contracts.
                                (1)(iii) . . . When ONRR
                                 determines that the value of
                                 the transportation may be
                                 unreasonable, ONRR will notify
                                 the lessee and give the lessee
                                 an opportunity to provide
                                 written information justifying
                                 the lessee's transportation
                                 costs..
----------------------------------------------------------------------------------------------------------------
1206.57(a)(2)(i)..............  (a) Arm's-length transportation     Burden covered under Sec.   1206.57(a)(3).
                                 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 ONRR approval..
----------------------------------------------------------------------------------------------------------------
1206.57(a)(2)(ii).............  (a) Arm's-length transportation               20               1              20
                                 contracts.
                                (2)(ii) Notwithstanding the
                                 requirements of paragraph (i),
                                 the lessee may propose to ONRR
                                 a cost allocation method on the
                                 basis of the values of the
                                 products transported. . . ..
----------------------------------------------------------------------------------------------------------------
1206.57(a)(3).................  (a) Arm's-length transportation               40               1              40
                                 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 ONRR. . . . The lessee shall
                                 submit all available data to
                                 support its proposal. . . ..
----------------------------------------------------------------------------------------------------------------

[[Page 13622]]

 
1206.57(b)(1).................  (b) Non-arm's-length or no         Burden covered under Sec.   1206.57(c)(2)(i)
                                 contract.                                          and (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 ONRR-4110 is filed with
                                 ONRR, unless ONRR approves a
                                 longer period upon a showing of
                                 good cause by the lessee. . . ..
----------------------------------------------------------------------------------------------------------------
1206.57(b)(1).................  (b) Non-arm's-length or no         Burden covered under OMB Control Number 1012-
                                 contract.                          0004. Burden covered under Sec.   1210.52.
                                (1) . . . When necessary or
                                 appropriate, ONRR may direct a
                                 lessee to modify its actual
                                 transportation allowance
                                 deduction..
----------------------------------------------------------------------------------------------------------------
1206.57(b)(2)(iv).............  (b) Non-arm's-length or no                    20               1              20
                                 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
                                 ONRR..
----------------------------------------------------------------------------------------------------------------
1206.57(b)(2)(iv)(A)..........  (b) Non-arm's-length or no                    20               1              20
                                 contract.
                                (2)(iv)(A) . . . After an
                                 election is made, the lessee
                                 may not change methods without
                                 ONRR approval. . . ..
----------------------------------------------------------------------------------------------------------------
1206.57(b)(3)(i)..............  (b) Non-arm's-length or no                    40               1              40
                                 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 ONRR approval..
----------------------------------------------------------------------------------------------------------------
1206.57(b)(3)(ii).............  (b) Non-arm's-length or no                    20               1              20
                                 contract.
                                (3)(ii) Notwithstanding the
                                 requirements of paragraph (i),
                                 the lessee may propose to ONRR
                                 a cost allocation method on the
                                 basis of the values of the
                                 products transported. . . ..
----------------------------------------------------------------------------------------------------------------
1206.57(b)(4).................  (b) Non-arm's-length or no                    20               1              20
                                 contract.
                                (4) Where both gaseous and
                                 liquid products are transported
                                 through the same transportation
                                 system, the lessee shall
                                 propose a cost allocation
                                 procedure to ONRR. . . . The
                                 lessee shall submit all
                                 available data to support its
                                 proposal. . . ..
----------------------------------------------------------------------------------------------------------------
1206.57(b)(5).................  (b) Non-arm's-length or no                    20               1              20
                                 contract.
                                (5) A lessee may apply to ONRR
                                 for an exception from the
                                 requirement that it compute
                                 actual costs in accordance with
                                 paragraphs (b)(1) through
                                 (b)(4) of this section. . . ..
----------------------------------------------------------------------------------------------------------------
1206.57(c)(1)(i)..............  (c) Reporting requirements......               4               1               4
                                (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 ONRR-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 ONRR-2014, Report of Sales
                                 and Royalty Remittance. . . ..
----------------------------------------------------------------------------------------------------------------
1206.57(c)(1)(iii)............  (c) Reporting requirements......               4               1               4
                                (1) Arm's-length contracts.
                                 (iii) After the initial
                                 reporting period and for
                                 succeeding reporting periods,
                                 lessees must submit page one of
                                 Form ONRR-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 ONRR approves a longer
                                 period (during which period the
                                 lessee shall continue to use
                                 the allowance from the previous
                                 reporting period)..
----------------------------------------------------------------------------------------------------------------
1206.57(c)(1)(iv).............  (c) Reporting requirements......             AUDIT PROCESS. See note.
                                (1) Arm's-length contracts. (iv)
                                 ONRR 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 ONRR..
----------------------------------------------------------------------------------------------------------------

[[Page 13623]]

 
1206.57(c)(2)(i)..............  (c) Reporting requirements......               6               1               6
                                (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 ONRR-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
                                 ONRR-2014. . . . The initial
                                 report may be based upon
                                 estimated costs..
----------------------------------------------------------------------------------------------------------------
1206.57(c)(2)(iii)............  (c) Reporting requirements......               6               1               6
                                (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 ONRR-4110
                                 containing the actual costs for
                                 the previous reporting period.
                                 If oil transportation is
                                 continuing, the lessee shall
                                 include on Form ONRR-4110 its
                                 estimated costs for the next
                                 calendar year. . . . ONRR must
                                 receive the Form ONRR-4110
                                 within 3 months after the end
                                 of the previous reporting
                                 period, unless ONRR approves a
                                 longer period (during which
                                 period the lessee shall
                                 continue to use the allowance
                                 from the previous reporting
                                 period)..
----------------------------------------------------------------------------------------------------------------
1206.57(c)(2)(iv).............  (c) Reporting requirements......   Burden covered under Sec.   1206.57(c)(2)(i).
                                (2) Non-arm's-length or no
                                 contract..
                                (iv) For new transportation
                                 facilities or arrangements, the
                                 lessee's initial Form ONRR-4110
                                 shall include estimates of the
                                 allowable oil transportation
                                 costs for the applicable
                                 period. . . ..
----------------------------------------------------------------------------------------------------------------
1206.57(c)(2)(v)..............  (c) Reporting requirements......   Burden covered under Sec.   1206.57(c)(2)(i).
                                (2) Non-arm's-length or no
                                 contract..
                                (v) . . . only those allowances
                                 that have been approved by ONRR
                                 in writing . . ..
----------------------------------------------------------------------------------------------------------------
1206.57(c)(2)(vi).............  (c) Reporting requirements......             AUDIT PROCESS. See note.
                                (2) Non-arm's-length or no
                                 contract..
                                (vi) Upon request by ONRR, the
                                 lessee shall submit all data
                                 used to prepare its Form ONRR-
                                 4110. The data shall be
                                 provided within a reasonable
                                 period of time, as determined
                                 by ONRR..
----------------------------------------------------------------------------------------------------------------
1206.57(c)(4) and (e)(2)......  (c) Reporting requirements......   Burden covered under OMB Control Number 1012-
                                (4) Transportation allowances       0004. Burden covered under Sec.   1210.52.
                                 must be reported as a separate
                                 line item on Form ONRR-2014, .
                                 . ..
                                (e) Adjustments.................
                                (2) For lessees transporting
                                 production from Indian leases,
                                 the lessee must submit a
                                 corrected Form ONRR-2014 to
                                 reflect actual costs, . . ..
----------------------------------------------------------------------------------------------------------------
1206.59.......................  May I ask ONRR for valuation                  20               1              20
                                 guidance?.
                                You may ask ONRR for guidance in
                                 determining value. You may
                                 propose a value method to ONRR.
                                 Submit all available data
                                 related to your proposal and
                                 any additional information ONRR
                                 deems necessary. . . ..
----------------------------------------------------------------------------------------------------------------
1206.61(a) and (b)............  What records must I keep and                 AUDIT PROCESS. See note.
                                 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 ONRR, Indian
                                 representatives, or other
                                 authorized persons..
                                (b) You must retain all data
                                 relevant to the determination
                                 of royalty value. . . ..
----------------------------------------------------------------------------------------------------------------

[[Page 13624]]

 
                                          Part 1206--PRODUCT VALUATION
                                              Subpart E--Indian Gas
----------------------------------------------------------------------------------------------------------------
1206.172(b)(1)(ii)............  How do I value gas produced from               4              58             232
                                 leases in an index zone?.
                                (b) Valuing residue gas and gas
                                 before processing..
                                (1)(ii) Gas production that you
                                 certify on Form ONRR-4410, . .
                                 . is not processed before it
                                 flows into a pipeline with an
                                 index but which may be
                                 processed later; . . ..
----------------------------------------------------------------------------------------------------------------
1206.172(e)(6)(i) and (iii)...  (e) Determining the minimum                    3              11              33
                                 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 ONRR on Form ONRR-4411,
                                 Safety Net Report, no later
                                 than June 30 following each
                                 calendar year; . . ..
                                (iii) ONRR may order you to
                                 amend your safety net price
                                 within one year from the date
                                 your Form ONRR-4411 is due or
                                 is filed, whichever is later. .
                                 . ..
----------------------------------------------------------------------------------------------------------------
1206.172(e)(6)(ii)............  (e) Determining the minimum        Burden covered under OMB Control Number 1012-
                                 value for royalty purposes of      0004. Burden covered under Sec.   1210.52.
                                 gas sold beyond the first index
                                 pricing point.
                                (6)(ii) You must pay and report
                                 on Form ONRR-2014 additional
                                 royalties due no later than
                                 June 30 following each calendar
                                 year; . . ..
----------------------------------------------------------------------------------------------------------------
1206.172(f)(1)(ii), (f)(2),     (f ) Excluding some or all                    40               1              40
 and (f)(3).                     tribal leases from valuation
                                 under this section.
                                (1) An Indian tribe may ask ONRR
                                 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, ONRR 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 ONRR
                                 S to terminate exclusion of its
                                 leases from valuation under
                                 this section. . . ..
                                (3) The Indian tribe's request
                                 to ONRR under either paragraph
                                 (f)(1) or (2) of this section
                                 must be in the form of a tribal
                                 resolution. . . ..
----------------------------------------------------------------------------------------------------------------
1206.173(a)(1)................  How do I calculate the                         2              12              24
                                 alternative methodology for
                                 dual accounting?
                                (a) Electing a dual accounting
                                 method..
                                (1) . . . You may elect to
                                 perform the dual accounting
                                 calculation according to either
                                 Sec.   1206.176(a) (called
                                 actual dual accounting), or
                                 paragraph (b) of this section
                                 (called the alternative
                                 methodology for dual
                                 accounting)..
----------------------------------------------------------------------------------------------------------------
1206.173(a)(2)................  (a) Electing a dual accounting      Burden covered under Sec.   1206.173(a)(1).
                                 method.
                                (2) You must make a separate
                                 election to use the alternative
                                 methodology for dual accounting
                                 for your Indian leases in each
                                 ONRR S-designated area. . . ..
----------------------------------------------------------------------------------------------------------------
1206.174(a)(4)(ii)............  How do I value gas production      Burden covered under OMB Control Number 1012-
                                 when an index-based method         0004. Burden covered under Sec.   1210.52.
                                 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 ONRR-
                                 2014 to ONRR by the due date
                                 specified in the written notice
                                 from ONRR of the major portion
                                 value. . . ..
----------------------------------------------------------------------------------------------------------------

[[Page 13625]]

 
1206.174(b)(1)(i) and (iii);    (b) Arm's-length contracts......             AUDIT PROCESS. See note.
 (b)(2); (d)(2).                (1)(i) You have the burden of
                                 demonstrating that your
                                 contract is arm's-length. . . ..
                                (iii) . . . In these
                                 circumstances, ONRR will notify
                                 you and give you an opportunity
                                 to provide written information
                                 justifying your value. . . ..
                                (2) ONRR 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 ONRR or Indian
                                 representatives, to the Office
                                 of the Inspector General of the
                                 Department, or other authorized
                                 persons. . . ..
----------------------------------------------------------------------------------------------------------------
1206.174(d)...................  (d) Supporting data. If you        Burden covered under OMB Control Number 1012-
                                 determine the value of                                0004.
                                 production under paragraph (c)
                                 of this section, you must
                                 retain all data relevant to
                                 determination of royalty value.
----------------------------------------------------------------------------------------------------------------
1206.174(f)...................  (f) Value guidance. You may ask               40               1              40
                                 ONRR for guidance in
                                 determining value. You may
                                 propose a valuation method to
                                 ONRR. Submit all available data
                                 related to your proposal and
                                 any additional information ONRR
                                 deems necessary. . ..
----------------------------------------------------------------------------------------------------------------
1206.175(d)(4)................  How do I determine quantities                 20               1              20
                                 and qualities of production for
                                 computing royalties?
                                (d)(4) You may request ONRR
                                 approval of other methods for
                                 determining the quantity of
                                 residue gas and gas plant
                                 products allocable to each
                                 lease. . . ..
----------------------------------------------------------------------------------------------------------------
1206.176(b)...................  How do I perform accounting for     Burden covered under Sec.   1206.173(a)(1).
                                 comparison?.
                                (b) If you are required to
                                 account for comparison, you may
                                 elect to use the alternative
                                 dual accounting methodology
                                 provided for in Sec.   1206.173
                                 instead of the provisions in
                                 paragraph (a) of this section..
----------------------------------------------------------------------------------------------------------------
1206.176(c)...................  (c) . . . If you do not perform              Burden covered under Sec.
                                 dual accounting, you must                      1206.172(b)(1)(ii).
                                 certify to ONRR that gas flows
                                 into such a pipeline before it
                                 is processed.
----------------------------------------------------------------------------------------------------------------
                                            Transportation Allowances
----------------------------------------------------------------------------------------------------------------
1206.177(c)(2) and (c)(3).....  What general requirements           Burden covered under Sec.   1206.56(b)(2).
                                 regarding transportation
                                 allowances apply to me?
                                (c)(2) If you ask ONRR, ONRR 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 ONRR-
                                 4393, Request to Exceed
                                 Regulatory Allowance
                                 Limitation) must contain all
                                 relevant and supporting
                                 documentation necessary for
                                 ONRR to make a determination..
----------------------------------------------------------------------------------------------------------------
1206.178(a)(1)(i).............  How do I determine a                           1              18              18
                                 transportation allowance?.
                                (a) Determining a transportation
                                 allowance under an arm's-length
                                 contract..
                                (1)(i) . . . You are required to
                                 submit to ONRR a copy of your
                                 arm's-length transportation
                                 contract(s) and all subsequent
                                 amendments to the contract(s)
                                 within 2 months of the date
                                 ONRR receives your report which
                                 claims the allowance on the
                                 Form ONRR-2014..
----------------------------------------------------------------------------------------------------------------

[[Page 13626]]

 
1206.178(a)(1)(iii)...........  (a) Determining a transportation             AUDIT PROCESS. See note.
                                 allowance under an arm's-length
                                 contract.
                                (1)(iii) If ONRR 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,
                                 ONRR will notify you and give
                                 you an opportunity to provide
                                 written information justifying
                                 your transportation costs..
----------------------------------------------------------------------------------------------------------------
1206.178(a)(2)(i) and (ii)....  (a) Determining a transportation              20               1              20
                                 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 ONRR approval, or
                                 without lessor approval on
                                 tribal leases..
                                (ii) As an alternative to
                                 paragraph (a)(2)(i) of this
                                 section, you may propose to
                                 ONRR a cost allocation method
                                 based on the values of the
                                 products transported. . . ..
----------------------------------------------------------------------------------------------------------------
1206.178(a)(3)(i) and (ii)....  (a) Determining a transportation              40               1              40
                                 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 ONRR. . . ..
                                (ii) You are required to submit
                                 all relevant data to support
                                 your allocation proposal. . . ..
----------------------------------------------------------------------------------------------------------------
1206.178(b)(1)(ii)............  (b) Determining a transportation              15               5              75
                                 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 ONRR
                                 on Form ONRR-4295, Gas
                                 Transportation Allowance
                                 Report, within 3 months after
                                 the end of the 12-month period
                                 to which the allowance applies.
                                 . . ..
----------------------------------------------------------------------------------------------------------------
1206.178(b)(2)(iv)............  (b) Determining a transportation              20               1              20
                                 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 ONRR
                                 approval..
----------------------------------------------------------------------------------------------------------------
1206.178(b)(2)(iv)(A).........  (b) Determining a transportation              20               1              20
                                 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 ONRR approval.
                                 . . ..
----------------------------------------------------------------------------------------------------------------
1206.178(b)(3)(i).............  (b) Determining a transportation              40               1              40
                                 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
                                 ONRR approval..
----------------------------------------------------------------------------------------------------------------
1206.178(b)(3)(ii)............  (b) Determining a transportation              20               1              20
                                 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 ONRR a cost
                                 allocation method based on the
                                 values of the products
                                 transported. . . ..
----------------------------------------------------------------------------------------------------------------
1206.178(b)(5)................  (b) Determining a transportation              40               1              40
                                 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 ONRR. .
                                 . . You are required to submit
                                 all relevant data to support
                                 your proposal. . . ..
----------------------------------------------------------------------------------------------------------------
1206.178(d)(1)................  (d) Reporting your                           AUDIT PROCESS. See note.
                                 transportation allowance.
                                (1) If ONRR requests, you must
                                 submit all data used to
                                 determine your transportation
                                 allowance . . ..
----------------------------------------------------------------------------------------------------------------

[[Page 13627]]

 
1206.178(d)(2), (e), and        (d) Reporting your                 Burden covered under OMB Control Number 1012-
 (f)(1).                         transportation allowance.          0004. Burden covered under Sec.   1210.52.
                                (2) You must report
                                 transportation allowances as a
                                 separate entry on Form ONRR-
                                 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 ONRR-2014, you are
                                 required to report and pay
                                 additional royalties due, plus
                                 interest computed under 30 CFR
                                 1218.54 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 ONRR-2014 by
                                 the amount received or credited
                                 for the affected reporting
                                 period..
----------------------------------------------------------------------------------------------------------------
                                              Processing Allowances
----------------------------------------------------------------------------------------------------------------
1206.180(a)(1)(i).............  How do I determine an actual                   1               2               2
                                 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 ONRR
                                 a copy of your arm's-length
                                 contract(s) and all subsequent
                                 amendments to the contract(s)
                                 within 2 months of the date
                                 ONRR receives your first report
                                 that deducts the allowance on
                                 the Form ONRR-2014..
----------------------------------------------------------------------------------------------------------------
1206.180(a)(1)(iii)...........  (a) Determining a processing                 AUDIT PROCESS. See note.
                                 allowance if you have an arm's-
                                 length processing contract.
                                (1)(iii) If ONRR 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, ONRR will
                                 notify you and give you an
                                 opportunity to provide written
                                 information justifying your
                                 processing costs..
----------------------------------------------------------------------------------------------------------------
1206.180(a)(3)................  (a) Determining a processing                  40               1              40
                                 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 ONRR. .
                                 . . You are required to submit
                                 all relevant data to support
                                 your proposal. . . ..
----------------------------------------------------------------------------------------------------------------
1206.180(b)(1)(ii)............  (b) Determining a processing                  20              12            1200
                                 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 ONRR
                                 on Form ONRR-4109, Gas
                                 Processing Allowance Summary
                                 Report, within 3 months after
                                 the end of the 12-month period
                                 for which the allowance
                                 applies. . . ..
----------------------------------------------------------------------------------------------------------------
1206.180(b)(2)(iv)............  (b) Determining a processing                  20               1              20
                                 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 ONRR
                                 approval..
----------------------------------------------------------------------------------------------------------------
1206.180(b)(2)(iv) (A)........  (b) Determining a processing                  20               1              20
                                 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 ONRR approval.
                                 . . ..
----------------------------------------------------------------------------------------------------------------
1206.180(b)(3)................  (b) Determining a processing                  20               1              20
                                 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 ONRR agree to an
                                 alternative.
----------------------------------------------------------------------------------------------------------------

[[Page 13628]]

 
1206.180(c)(1)................  (c) Reporting your processing                AUDIT PROCESS. See note.
                                 allowance.
                                (1) If ONRR requests, you must
                                 submit all data used to
                                 determine your processing
                                 allowance. . . ..
----------------------------------------------------------------------------------------------------------------
1206.180(c)(2) and (d)........  (c) Reporting your processing      Burden covered under OMB Control Number 1012-
                                 allowance.                         0004. Burden covered under Sec.   1210.52.
                                (2) You must report gas
                                 processing allowances as a
                                 separate entry on the Form ONRR-
                                 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 ONRR-2014, you are
                                 required to pay additional
                                 royalties, plus interest
                                 computed under 30 CFR 1218.54
                                 from the first day of the first
                                 month you deducted a processing
                                 allowance until the date you
                                 pay the royalties due. . . ..
----------------------------------------------------------------------------------------------------------------
1206.181(c)...................  How do I establish processing                 40               1              40
                                 costs for dual accounting
                                 purposes when I do not process
                                 the gas?
                                (c) A proposed comparable
                                 processing fee submitted to
                                 either the tribe and ONRR (for
                                 tribal leases) or ONRR (for
                                 allotted leases) with your
                                 supporting documentation
                                 submitted to ONRR. If ONRR does
                                 not take action on your
                                 proposal within 120 days, the
                                 proposal will be deemed to be
                                 denied and subject to appeal to
                                 the ONRR Director under 30 CFR
                                 part 1290..
----------------------------------------------------------------------------------------------------------------
                PART 1207--SALES AGREEMENTS OR CONTRACTS GOVERNING THE DISPOSAL OF LEASE PRODUCTS
                                          Subpart A--General Provisions
----------------------------------------------------------------------------------------------------------------
1207.4(b).....................  Contracts made pursuant to old               AUDIT PROCESS. See note.
                                 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 . . ..
----------------------------------------------------------------------------------------------------------------
1207.5........................  Contract and sales agreement                 AUDIT PROCESS. See note.
                                 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 ONRR, State or
                                 Indian representatives, other
                                 ONRR or BLM officials, auditors
                                 of the General Accounting
                                 Office, or other persons
                                 authorized to receive such
                                 documents, or shall be
                                 submitted to ONRR within a
                                 reasonable period of time, as
                                 determined by ONRR. 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 1212..
----------------------------------------------------------------------------------------------------------------
    Total Burden..............  ................................  ..............             148           2,269
----------------------------------------------------------------------------------------------------------------
Note: AUDIT PROCESS--The Office of Regulatory Affairs determined that the audit process is exempt from the
  Paperwork Reduction Act of 1995 because ONRR 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.

III. Request for Comments

    Section 3506(c)(2)(A) of the PRA requires each agency to ``. . . 
provide 60-day notice in the Federal Register . . . and otherwise 
consult with members of the public and affected agencies concerning 
each proposed collection of information . . .'' Agencies must 
specifically solicit comments to: (1) Evaluate whether the proposed 
collection of information is necessary for the agency to perform its 
duties, including whether the information is useful; (2) evaluate the 
accuracy of the agency's estimate of the burden of the proposed 
collection of information; (3) enhance the quality, usefulness, and 
clarity of the information that ONRR collects; and (4) 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 record-keepers 
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 that you use to estimate (1) major cost factors, 
including system and technology acquisition, (2) expected useful life 
of capital equipment, (3) discount rate(s), and (4) the period over 
which you incur costs.

[[Page 13629]]

Capital and startup costs include, among other items, computers and 
software that you purchase to prepare for collecting information and 
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 
Federal 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, free of charge, upon request. We also will post the ICR at 
http://www.onrr.gov/Laws_R_D/FRNotices/ICR0103.htm.
    Public Comment Policy: ONRR will post all comments, including names 
and addresses of respondents at http://www.regulations.gov. Before 
including Personally Identifiable Information (PII), such as your 
address, phone number, email address, or other personal information in 
your comment(s), you should be aware that your entire comment 
(including PII) may be made available to the public at any time. While 
you may ask us, in your comment, to withhold PII from public view, we 
cannot guarantee that we will be able to do so.

    Dated: March 3, 2015.
Gregory J. Gould,
Director, Office of Natural Resources Revenue.
[FR Doc. 2015-05854 Filed 3-13-15; 8:45 am]
 BILLING CODE 4335-30-P