[Federal Register Volume 80, Number 189 (Wednesday, September 30, 2015)]
[Notices]
[Pages 58776-58786]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-24840]


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DEPARTMENT OF THE INTERIOR

Office of Natural Resources Revenue

[Docket No. ONRR-2011-0021; DS63610000 DR2PS0000.CH7000 156D0102R2; OMB 
Control Number 1012-0002]


Agency Information Collection Activities: Indian Oil and Gas 
Valuation; Comment Request

AGENCY: Office of Natural Resources Revenue, Interior.

ACTION: Notice of extension.

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SUMMARY: To comply with the Paperwork Reduction Act of 1995 (PRA), the 
Office of Natural Resources Revenue (ONRR) is notifying the public that 
we have submitted to the Office of Management and Budget (OMB) an 
information collection request (ICR) to renew approval of the paperwork 
requirements in the regulations under 30 CFR parts 1202, 1206, and 
1207. This notice also provides the public a second opportunity to 
comment on the paperwork burden of these regulatory requirements.

DATES: OMB has up to 60 days to approve or disapprove this information 
collection request but may respond after 30 days; therefore, you should 
submit your public comments to OMB by October 30, 2015, for the 
assurance of consideration.

ADDRESSES: You may submit your written comments directly to the Desk 
Officer for the Department of the Interior (OMB Control Number 1012-
0002), Office of Information and Regulatory Affairs, OMB, by email to 
[email protected] or telefax at (202) 395-5806. Please also 
mail a copy of your comments to Mr. Luis Aguilar, Regulatory 
Specialist, ONRR, P.O. Box 25165, MS 61030A, Denver, Colorado 80225-
0165, or email [email protected]. Please reference OMB Control 
Number 1012-0002 in your comments.

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 (free of charge) of 
(1) the ICR, (2) any associated forms, and (3) the regulations that 
require the subject collection of information. You may also review the 
information collection request online at http://www.reginfo.gov/public/do/PRAMain.

SUPPLEMENTARY INFORMATION: 

I. Abstract

    The Secretary of the United States Department of the Interior is 
responsible for mineral resource development on Federal and Indian 
lands and the Outer Continental Shelf (OCS). Under various laws, the 
Secretary's responsibility is to manage mineral resources production on 
Federal and Indian lands and the OCS, collect royalties due, and 
distribute the funds collected under those laws. The Secretary also has 
a trust responsibility to manage Indian lands and seek advice and 
information from Indian beneficiaries. ONRR performs the minerals 
revenue management functions for the Secretary and assists the 
Secretary in carrying out the Department's trust responsibility for 
Indian lands. Public laws pertaining to mineral leases on Federal and 
Indian lands are available at http://www.onrr.gov/Laws_R_D/PubLaws/default.htm.
    Information collections that we cover in this ICR are found at 30 
CFR part 1202, subparts C and J, which pertain to royalties; part 1206, 
subparts B and E, which govern the valuation of oil and gas produced 
from leases on Indian lands; and part 1207, which pertains to 
recordkeeping. Indian Tribes and individual Indian mineral owners 
receive all royalties generated from their lands. Determining product 
valuation is essential to ensure that Indian Tribes and individual 
Indian mineral owners receive payment on the full value of the minerals 
removed from their lands. Failure to collect the data that we describe 
in this ICR could result in the undervaluation of leased minerals on 
Indian lands. All data reported is subject to subsequent audit and 
adjustment.

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, these 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 that a lessee determines 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 under applicable regulations; and 
(2) whether the lessees reported and paid the proper amount of 
royalties. Lessees must use Form ONRR-4110 for both arm's-length and 
non-arm's-length contracts.

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). These 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

[[Page 58777]]

an election for actual or alternative dual accounting for Indian 
leases.
    The regulations require lessees to submit Form ONRR-4411, Safety 
Net Report, when they sell gas production from an Indian oil or gas 
lease 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 under 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 under applicable regulations; and 
(2) whether the lessees reported and paid the proper amount of royalty.

Indian Oil and Gas

    Lessees must submit Form ONRR-4393, Request to Exceed Regulatory 
Allowance Limitation, for both Federal and Indian leases to request to 
exceed the regulatory allowance limitation. Most of the burden hours 
are incurred on Federal leases; therefore, OMB approved the form under 
OMB Control Number 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.

OMB Approval

    We are requesting OMB's approval to continue to collect this 
information. Not collecting this information would limit the 
Secretary's ability to discharge fiduciary duties and may also result 
in the inability to confirm the accurate royalty value to Indian Tribes 
and individual Indian mineral owners. ONRR protects proprietary 
information that it receives and does not collect items of a sensitive 
nature. The requirement to report is mandatory for Form ONRR-4410, 
Accounting for Comparison [Dual Accounting], and for Form ONRR-4411, 
Safety Net Report, under certain circumstances. For all other forms in 
this collection, the requirement to report is required 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-
4393, ONRR-4410, and ONRR-4411.
    Frequency of Response: Annually and on occasion.
    Estimated Number and Description of Respondents: 148 Indian Mineral 
extractors holding leases on Indian Lands.
    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 business that are considered usual 
and customary. The following chart shows the estimated burden hours by 
CFR section and paragraph:

----------------------------------------------------------------------------------------------------------------
                                                                                      Average
                                         Reporting and                               number of     Annual burden
              30 CFR                     recordkeeping           Hour burden          annual           hours
                                          requirement                                responses
----------------------------------------------------------------------------------------------------------------
                                              PART 1202--ROYALTIES
                                        Subpart C--Federal and Indian Oil
----------------------------------------------------------------------------------------------------------------
1202.101.........................  Standards for reporting    Burden covered under Sec.   1210.52 in OMB Control
                                    and paying royalties.                      Number 1012-0004.
                                   Oil volumes are to be
                                    reported in barrels of
                                    clean oil of 42
                                    standard U.S. gallons
                                    (231 cubic inches each)
                                    at 60 [deg]F. . . .
----------------------------------------------------------------------------------------------------------------
                                  Subpart J--Gas Production From Indian Leases
----------------------------------------------------------------------------------------------------------------
1202.551(b)......................  How do I determine the     Burden covered under Sec.   1210.52 in OMB Control
                                    volume of production                       Number 1012-0004.
                                    for which I must pay
                                    royalty if my lease is
                                    not in an approved
                                    Federal unit or
                                    communitization
                                    agreement (AFA)?
                                   (b) You and all other
                                    persons paying
                                    royalties on the lease
                                    must report and pay
                                    royalties based on your
                                    takes. . . .
----------------------------------------------------------------------------------------------------------------
1202.551(c)......................  (c) You and all other     1..................               1               1
                                    persons paying
                                    royalties on the lease
                                    may ask ONRR for
                                    permission . . . . to
                                    report entitlements . .
                                    .
----------------------------------------------------------------------------------------------------------------
1202.558(a) and (b)..............  What standards do I use    Burden covered under Sec.   1210.52 in OMB Control
                                    to report and pay                          Number 1012-0004.
                                    royalties on 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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[[Page 58778]]

 
                                          PART 1206--PRODUCT VALUATION
                                              Subpart B--Indian Oil
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1206.56(b)(2)....................  Transportation            4..................               1               4
                                    allowances--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                        AUDIT PROCESS. See note.
                                    transportation
                                    allowances.
                                   (a) Arm's-length
                                    transportation
                                    contracts.
                                   (1)(i) . . . The lessee
                                    shall have the burden
                                    of demonstrating that
                                    its contract is arm's-
                                    length.
----------------------------------------------------------------------------------------------------------------
1206.57(a)(1)(i).................  (a) Arm's-length            Burden covered under Sec.   1206.57(c)(1)(i) and
                                    transportation                                  (iii).
                                    contracts.
                                   (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                        AUDIT PROCESS. See note.
                                    transportation
                                    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               Burden covered under Sec.   1206.57(a)(3).
                                    transportation
                                    contracts.
                                   (2)(i) . . . Except as
                                    provided in this
                                    paragraph, no allowance
                                    may be taken for the
                                    costs of transporting
                                    lease production which
                                    is not royalty-bearing
                                    without ONRR approval.
----------------------------------------------------------------------------------------------------------------
1206.57(a)(2)(ii)................  (a) Arm's-length          20.................               1              20
                                    transportation
                                    contracts.
                                   (2)(ii) Notwithstanding
                                    the requirements of
                                    paragraph (i), the
                                    lessee may propose to
                                    ONRR a cost allocation
                                    method on the basis of
                                    the values of the
                                    products transported. .
                                    . .
----------------------------------------------------------------------------------------------------------------
1206.57(a)(3)....................  (a) Arm's-length          40.................               1              40
                                    transportation
                                    contracts.
                                   (3) If an arm's-length
                                    transportation contract
                                    includes both gaseous
                                    and liquid products,
                                    and the transportation
                                    costs attributable to
                                    each product cannot be
                                    determined from the
                                    contract, the lessee
                                    shall propose an
                                    allocation procedure to
                                    ONRR. . . . The lessee
                                    shall submit all
                                    available data to
                                    support its proposal. .
                                    . .
----------------------------------------------------------------------------------------------------------------
1206.57(b)(1)....................  (b) Non-arm's-length or     Burden covered under Sec.   1206.57(c)(2)(i) and
                                    no contract.                                    (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    Burden covered under Sec.   1210.52 in OMB Control
                                    no contract.                               Number 1012-0004.
                                   (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   20.................               1              20
                                    no contract.

[[Page 58779]]

 
                                   (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   20.................               1              20
                                    no 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   40.................               1              40
                                    no contract.
                                   (3)(i) . . . Except as
                                    provided in this
                                    paragraph, the lessee
                                    may not take an
                                    allowance for
                                    transporting lease
                                    production which is not
                                    royalty bearing without
                                    ONRR approval.
----------------------------------------------------------------------------------------------------------------
1206.57(b)(3)(ii)................  (b) Non-arm's-length or   20.................               1              20
                                    no 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   20.................               1              20
                                    no contract.
                                   (4) Where both gaseous
                                    and liquid products are
                                    transported through the
                                    same transportation
                                    system, the lessee
                                    shall propose a cost
                                    allocation procedure to
                                    ONRR. . . . The lessee
                                    shall submit all
                                    available data to
                                    support its proposal. .
                                    . .
----------------------------------------------------------------------------------------------------------------
1206.57(b)(5)....................  (b) Non-arm's-length or   20.................               1              20
                                    no 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             4..................               1               4
                                    requirements.
                                   (1) Arm's-length
                                    contracts. (i) With the
                                    exception of those
                                    transportation
                                    allowances specified in
                                    paragraphs (c)(1)(v)
                                    and (c)(1)(vi) of this
                                    section, the lessee
                                    shall submit page one
                                    of the initial Form
                                    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 MMS-2014,
                                    Report of Sales and
                                    Royalty Remittance. . .
                                    .
----------------------------------------------------------------------------------------------------------------
1206.57(c)(1)(iii)...............  (c) Reporting             4..................               1               4
                                    requirements.
                                   (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                           AUDIT PROCESS. See note.
                                    requirements.
                                   (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.
----------------------------------------------------------------------------------------------------------------
1206.57(c)(2)(i).................  (c) Reporting             6..................               1               6
                                    requirements.
                                   (2) Non-arm's-length or
                                    no contract.

[[Page 58780]]

 
                                   (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             6..................               1               6
                                    requirements.
                                   (2) Non-arm's-length or
                                    no contract.
                                   (iii) For calendar-year
                                    reporting periods
                                    succeeding the initial
                                    reporting period, the
                                    lessee shall submit a
                                    completed Form 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                Burden covered under Sec.   1206.57(c)(2)(i).
                                    requirements.
                                   (2) Non-arm's-length or
                                    no contract.
                                   (iv) For new
                                    transportation
                                    facilities or
                                    arrangements, the
                                    lessee's initial Form
                                    ONRR-4110 shall include
                                    estimates of the
                                    allowable oil
                                    transportation costs
                                    for the applicable
                                    period. . .
----------------------------------------------------------------------------------------------------------------
1206.57(c)(2)(v).................  (c) Reporting                Burden covered under Sec.   1206.57(c)(2)(i).
                                    requirements.
                                   (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                           AUDIT PROCESS. See note.
                                    requirements.
                                   (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              Burden covered under Sec.   1210.52 in OMB Control
                                    requirements.                              Number 1012-0004.
                                   (4) Transportation
                                    allowances 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        20.................               1              20
                                    valuation 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                AUDIT PROCESS. See note.
                                    and produce?.
                                   (a) On request, you must
                                    make available sales,
                                    volume, and
                                    transportation data for
                                    production you sold,
                                    purchased, or obtained
                                    from the field or area.
                                    You must make this data
                                    available to ONRR,
                                    Indian representatives,
                                    or other authorized
                                    persons.

[[Page 58781]]

 
                                   (b) You must retain all
                                    data relevant to the
                                    determination of
                                    royalty value. . . .
----------------------------------------------------------------------------------------------------------------
                                          PART 1206--PRODUCT VALUATION
                                              Subpart E--Indian Gas
----------------------------------------------------------------------------------------------------------------
1206.172(b)(1)(ii)...............  How do I value gas        4..................              58             232
                                    produced from 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       3..................              11              33
                                    minimum value for
                                    royalty purposes of gas
                                    sold beyond the first
                                    index pricing point.
                                   (6)(i) You must report
                                    the safety net price
                                    for each index zone to
                                    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        Burden covered under Sec.   1210.52 in OMB Control
                                    minimum value for                          Number 1012-0004.
                                    royalty purposes of 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), and    (f) Excluding some or     40.................               1              40
 (f)(3).                            all 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           Burden covered under Sec.   1206.173(a)(1).
                                    accounting method.
                                   (2) You must make a
                                    separate election to
                                    use the alternative
                                    methodology for dual
                                    accounting for your
                                    Indian leases in each
                                    ONRR S-designated area.
                                    . . .
----------------------------------------------------------------------------------------------------------------
1206.174(a)(4)(ii)...............  How do I value gas         Burden covered under Sec.   1210.52 in OMB Control
                                    production when an                         Number 1012-0004.
                                    index-based method
                                    cannot be used?
                                   (a) Situations in which
                                    an index-based method
                                    cannot be used.

[[Page 58782]]

 
                                   (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. . . .
----------------------------------------------------------------------------------------------------------------
1206.174(b)(1)(i) and (iii);       (b) Arm's-length                        AUDIT PROCESS. See note.
 (b)(2); (d)(2).                    contracts.
                                   (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    Burden covered under OMB Control Number 1012-0004.
                                    you determine the value
                                    of 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   40.................               1              40
                                    may ask 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        20.................               1              20
                                    quantities 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              Burden covered under Sec.   1206.173(a)(1).
                                    accounting for
                                    comparison?.
                                   (b) If you are required
                                    to account for
                                    comparison, you may
                                    elect to use the
                                    alternative dual
                                    accounting methodology
                                    provided for in Sec.
                                    1206.173 instead of the
                                    provisions in paragraph
                                    (a) of this section.
----------------------------------------------------------------------------------------------------------------
1206.176(c)......................  (c) . . . If you do not     Burden covered under Sec.   1206.172(b)(1)(ii).
                                    perform dual
                                    accounting, you must
                                    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                   Burden covered under Sec.   1206.56(b)(2).
                                    requirements 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.

[[Page 58783]]

 
                                   (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.
----------------------------------------------------------------------------------------------------------------
1206.178(a)(1)(iii)..............  (a) Determining a                       AUDIT PROCESS. See note.
                                    transportation
                                    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         20.................               1              20
                                    transportation
                                    allowance under an
                                    arm's-length contract.
                                   (2)(i) . . . you cannot
                                    take an allowance for
                                    the costs of
                                    transporting lease
                                    production that is not
                                    royalty bearing without
                                    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         40.................               1              40
                                    transportation
                                    allowance under an
                                    arm's-length contract.
                                   (3)(i) If your arm's-
                                    length transportation
                                    contract includes both
                                    gaseous and liquid
                                    products and the
                                    transportation costs
                                    attributable to each
                                    cannot be determined
                                    from the contract, you
                                    must propose an
                                    allocation procedure to
                                    ONRR. . . .
                                   (ii) You are required to
                                    submit all relevant
                                    data to support your
                                    allocation proposal. .
                                    . .
----------------------------------------------------------------------------------------------------------------
1206.178(b)(1)(ii)...............  (b) Determining a         15.................               5              75
                                    transportation
                                    allowance under a non-
                                    arm's-length contract
                                    or no contract.
                                   (1)(ii) . . . You must
                                    submit the actual cost
                                    information to support
                                    the allowance to 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         20.................               1              20
                                    transportation
                                    allowance under a non-
                                    arm's-length contract
                                    or no contract.
                                   (2)(iv) You may use
                                    either depreciation
                                    with a return on
                                    undepreciated capital
                                    investment or a return
                                    on depreciable capital
                                    investment. . . . you
                                    may not later elect to
                                    change to the other
                                    alternative without
                                    ONRR approval.
----------------------------------------------------------------------------------------------------------------
1206.178(b)(2)(iv)(A)............  (b) Determining a         20.................               1              20
                                    transportation
                                    allowance under a non-
                                    arm's-length contract
                                    or no contract.
                                   (2)(iv)(A) . . . Once
                                    you make an election,
                                    you may not change
                                    methods without ONRR
                                    approval. . . .
----------------------------------------------------------------------------------------------------------------
1206.178(b)(3)(i)................  (b) Determining a         40.................               1              40
                                    transportation
                                    allowance under a non-
                                    arm's-length contract
                                    or no contract.
                                   (3)(i) . . . Except as
                                    provided in this
                                    paragraph, you may not
                                    take an allowance for
                                    transporting a product
                                    that is not royalty
                                    bearing without ONRR
                                    approval.
----------------------------------------------------------------------------------------------------------------

[[Page 58784]]

 
1206.178(b)(3)(ii)...............  (b) Determining a         20.................               1              20
                                    transportation
                                    allowance under a non-
                                    arm's-length contract
                                    or no contract.
                                   (3)(ii) As an
                                    alternative to the
                                    requirements of
                                    paragraph (b)(3)(i) of
                                    this section, you may
                                    propose to ONRR a cost
                                    allocation method based
                                    on the values of the
                                    products transported. .
                                    . .
----------------------------------------------------------------------------------------------------------------
1206.178(b)(5)...................  (b) Determining a         40.................               1              40
                                    transportation
                                    allowance under a non-
                                    arm's-length contract
                                    or no contract.
                                   (5) If you transport
                                    both gaseous and liquid
                                    products through the
                                    same transportation
                                    system, you must
                                    propose a cost
                                    allocation procedure to
                                    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 . . .
----------------------------------------------------------------------------------------------------------------
1206.178(d)(2), (e), and (f)(1)..  (d) Reporting your         Burden covered under Sec.   1210.52 in OMB Control
                                    transportation                             Number 1012-0004.
                                    allowance.
                                   (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     1..................               2               2
                                    actual processing
                                    allowance?
                                   (a) Determining a
                                    processing allowance if
                                    you have an arm's-
                                    length processing
                                    contract.
                                   (1)(i) . . . You have
                                    the burden of
                                    demonstrating that your
                                    contract is arm's-
                                    length. You are
                                    required to submit to
                                    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                       AUDIT PROCESS. See note.
                                    processing 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         40.................               1              40
                                    processing allowance if
                                    you have an arm's-
                                    length processing
                                    contract.

[[Page 58785]]

 
                                   (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         100................              12           1,200
                                    processing allowance if
                                    you have a non-arm's-
                                    length contract or no
                                    contract.
                                   (1)(ii) . . . You must
                                    submit the actual cost
                                    information to support
                                    the allowance to 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         20.................               1              20
                                    processing allowance if
                                    you have a non-arm's-
                                    length contract or no
                                    contract.
                                   (2)(iv) You may use
                                    either depreciation
                                    with a return on
                                    undepreciable capital
                                    investment or a return
                                    on depreciable capital
                                    investment. . . . you
                                    may not later elect to
                                    change to the other
                                    alternative without
                                    ONRR approval.
----------------------------------------------------------------------------------------------------------------
1206.180(b)(2)(iv)(A)............  (b) Determining a         20.................               1              20
                                    processing allowance if
                                    you have a non-arm's-
                                    length contract or no
                                    contract.
                                   (2)(iv)(A) . . . Once
                                    you make an election,
                                    you may not change
                                    methods without ONRR
                                    approval. . . .
----------------------------------------------------------------------------------------------------------------
1206.180(b)(3)...................  (b) Determining a         20.................               1              20
                                    processing allowance if
                                    you have a non-arm's-
                                    length contract or no
                                    contract.
                                   (3) Your processing
                                    allowance under this
                                    paragraph (b) must be
                                    determined based upon a
                                    calendar year or other
                                    period if you and ONRR
                                    agree to an
                                    alternative.
----------------------------------------------------------------------------------------------------------------
1206.180(c)(1)...................  (c) Reporting your                      AUDIT PROCESS. See note.
                                    processing 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         Burden covered under Sec.   1210.52 in OMB Control
                                    processing allowance.                      Number 1012-0004.
                                   (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        40.................               1              40
                                    processing costs for
                                    dual accounting
                                    purposes when I do not
                                    process the gas?
                                   (c) A proposed
                                    comparable processing
                                    fee submitted to either
                                    the tribe and 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.
----------------------------------------------------------------------------------------------------------------

[[Page 58786]]

 
                PART 1207--SALES AGREEMENTS OR CONTRACTS GOVERNING THE DISPOSAL OF LEASE PRODUCTS
                                          Subpart A--General Provisions
----------------------------------------------------------------------------------------------------------------
1207.4(b)........................  Contracts made pursuant                 AUDIT PROCESS. See note.
                                    to old form leases.
                                   (b) The stipulation, the
                                    substance of which must
                                    be included in the
                                    contract, or be made
                                    the subject matter of a
                                    separate instrument
                                    properly identifying
                                    the leases affected
                                    thereby, is as follows
                                    . . .
----------------------------------------------------------------------------------------------------------------
1207.5...........................  Contract and sales                      AUDIT PROCESS. See note.
                                    agreement retention.
                                   Copies of all sales
                                    contracts, posted price
                                    bulletins, etc., and
                                    copies of all
                                    agreements, other
                                    contracts, or other
                                    documents which are
                                    relevant to the
                                    valuation of production
                                    are to be maintained by
                                    the lessee and made
                                    available upon request
                                    during normal working
                                    hours to authorized
                                    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 associated with 
this information collection.

III. Request for Comments

    Public Disclosure Statement: The PRA (44 U.S.C. 3501 et seq.) 
provides that an agency may not conduct or sponsor--and a person is not 
required to respond to--a collection of information unless it displays 
a currently valid OMB control number.
    Comments: 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: (a) Evaluate whether the 
proposed collection of information is necessary for the agency to 
perform its duties, including whether the information is useful; (b) 
evaluate the accuracy of the agency's estimate of the burden of the 
proposed collection of information; (c) enhance the quality, 
usefulness, and clarity of the information to be collected; and (d) 
minimize the burden on the respondents, including the use of automated 
collection techniques or other forms of information technology.
    To comply with the public consultation process, we published a 
notice in the Federal Register on March 16, 2015 (80 FR 13619), 
announcing that we would submit this ICR to OMB for approval. The 
notice provided the required 60-day comment period. No comments were 
received.
    If you wish to comment in response to this notice, you may send 
your comments to the offices listed under the ADDRESSES section of this 
notice. OMB has up to 60 days to approve or disapprove the information 
collection but may respond after 30 days. Therefore, to ensure maximum 
consideration, OMB should receive public comments by October 30, 2015.
    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: September 25, 2015.
Gregory J. Gould,
Director, Office of Natural Resources Revenue.
[FR Doc. 2015-24840 Filed 9-29-15; 8:45 am]
 BILLING CODE 4335-30-P