[Federal Register Volume 82, Number 196 (Thursday, October 12, 2017)]
[Notices]
[Pages 47573-47576]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-22011]


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DEPARTMENT OF THE INTERIOR

Office of Natural Resources Revenue

[Docket No. ONRR-2011-0006; DS63644000 DR2000000.CH7000 189D0102R2; OMB 
Control Number 1012-0009]


Agency Information Collection Activities: Submission to the 
Office of Management and Budget for Review and Approval; OCS Net Profit 
Share Payment Reporting

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), we, 
the Office of Natural Resources Revenue (ONRR), are proposing to renew 
an information collection.

DATES: Interested persons are invited to submit comments on or before 
November 13, 2017.

ADDRESSES: You may submit your written comments on this information 
collection request (ICR) to the Office of Management and Budget's Desk 
Officer for the Department of the Interior by email to 
[email protected]; or via facsimile to (202) 395-5806. Please 
mail a copy of your comments to Mr. Armand Southall, Regulatory 
Specialist, ONRR, P.O. Box 25165, MS 64400, Denver, Colorado 80225-
0165, or by email to

[[Page 47574]]

[email protected]. Please reference ``OMB Control Number 1012-
0009'' in the subject line of your comments.

FOR FURTHER INFORMATION CONTACT: For questions on technical issues, 
contact Mr. Roman Geissel, Deputy Program Manager, Audit and Compliance 
Management (ACM), ONRR, at (303) 231-3226, or email to 
[email protected]. For other questions, contact Mr. Armand 
Southall, at (303) 231-3221, or email to [email protected]. You 
may also contact Mr. Southall to obtain copies, at no cost, of (1) the 
ICR and (2) the regulations that require us to collect the information. 
You may view the ICR at http://www.reginfo.gov/public/do/PRAMain and 
select ``Information Collection Review,'' then select ``Department of 
the Interior'' in the drop-down box under ``Currently Under Review.''

SUPPLEMENTARY INFORMATION: In accordance with the Paperwork Reduction 
Act of 1995, we provide the general public and other Federal agencies 
with an opportunity to comment on new, proposed, revised, and 
continuing collections of information. This helps us assess the impact 
of our information collection requirements and minimize the public's 
reporting burden. It also helps the public understand our information 
collection requirements and provide the requested data in the desired 
format.
    We published a notice, with a 60-day public comment period 
soliciting comments on this collection of information, in the Federal 
Register on May 5, 2017 (82 FR 21261). We received the following 
comments in response to the notice: ``The burden hour estimate of 2,400 
hours annually for the current 14 lessees of producing NPSLs is a 
reasonable estimate. The instructions on the handling of NPSLs are 
clear. The recordkeeping requirements are easy to understand. The 
reporting format follows the standard ONRR-2014 format so it's easy to 
understand.''
    Once again, we are soliciting comments on this ICR that is 
described below. We are especially interested in public comment 
addressing the following issues: (1) Is the collection necessary to the 
proper functions of ONRR; (2) will this information be processed and 
used in a timely manner; (3) is the estimate of the burden accurate; 
(4) how might ONRR enhance the quality, usefulness, and clarity of the 
information collected; and (5) how might ONRR minimize the burden of 
this collection on the respondents, including through the use of 
information technology.
    Comments that you submit in response to this notice are a matter of 
public record. Before including your Personally Identifiable 
Information (PII), such as your address, phone number, email address, 
or other personal identifying 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 your PII from public view, we cannot guarantee 
that we will be able to do so.
    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). Under various laws, the Secretary's 
responsibility is to manage mineral resource production on Federal and 
Indian lands and the OCS, collect the royalties and other mineral 
revenues due, and distribute the funds collected. ONRR performs the 
royalty management functions and assists the Secretary in carrying out 
the Department's responsibility. 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.

I. General Information

    ONRR collects and uses this information to determine all allowable 
direct and allocable joint costs and credits under Sec.  1220.011 
incurred during the lease term, appropriate overhead allowance 
permitted on these costs under Sec.  1220.012, and allowances for 
capital recovery calculated under Sec.  1220.020. ONRR also collects 
this information to ensure that royalties or net profit share payments 
are accurately valued and appropriately paid. This ICR affects only oil 
and gas leases on submerged Federal lands on the OCS.

II. Information Collections

    Title 30 CFR part 1220 covers the net profit share lease (NPSL) 
program and establishes reporting requirements for determining the net 
profit share base under Sec.  1220.021 and calculating the net profit 
share payments due to the Federal government for the production of oil 
and gas from leases under Sec.  1220.022.

A. NPSL Bidding System

    To encourage exploration and development of oil and gas leases on 
submerged Federal lands on the OCS, the Bureau of Ocean Energy 
Management (BOEM) promulgated regulations at 30 CFR part 560--Outer 
Continental Shelf Oil and Gas Leasing. BOEM also promulgated specific 
implementing regulations for the NPSL bidding system at Sec.  
560.202(d). BOEM established the NPSL bidding system to balance a fair 
market return to the Federal government for the lease of its public 
lands with a fair profit to companies risking their investment capital. 
The system provides an incentive for early and expeditious exploration 
and development and provides for sharing the risks by the lessee and 
the Federal government. The NPSL bidding system incorporates a fixed 
capital recovery system as a means through which the lessee recovers 
costs of exploration and development from production revenues, along 
with a reasonable return on investment.

B. NPSL Capital Account

    The Federal government does not receive a profit share payment from 
an NPSL until the lessee shows a credit balance in its capital account; 
that is, cumulative revenues and other credits exceed cumulative costs. 
Lessees multiply the credit balance by the net profit share rate (30 to 
50 percent), resulting in the amount of net profit share payment due to 
the Federal government.
    ONRR requires lessees to maintain an NPSL capital account for each 
lease under Sec.  1220.010, which transfers to a new owner when sold. 
Following the cessation of production, lessees are also required to 
provide either an annual or a monthly report to the Federal government, 
using data from the capital account until the lease is terminated, 
expired, or relinquished.

C. NPSL Inventories

    The NPSL lessees must notify BOEM of their intent to perform an 
inventory and file a report after each inventory of controllable 
materiel under Sec. Sec.  1220.032 and 1220.031, respectively.

D. NPSL Audits

    When non-operators of an NPSL call for an audit, they must notify 
ONRR. When ONRR calls for an audit, the lessee must notify all non-
operators on the lease. These requirements are located at Sec.  
1220.033.

III. OMB Approval

    The information we collect under this ICR 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.
    We are requesting OMB approval to continue to collect this 
information. Not collecting this information would limit the 
Secretary's ability to discharge

[[Page 47575]]

fiduciary duties and may also result in the inability to confirm the 
accurate royalty value. ONRR protects the proprietary information 
received and does not collect items of a sensitive nature.

IV. Data

    Title: OCS Net Profit Share Payment Reporting, 30 CFR part 1220.
    OMB Control Number: 1012-0009.
    Bureau Form Number: None.
    Type of Review: Extension of a currently approved collection.
    Respondents/Affected Public: Businesses.
    Total Estimated Number of Annual Respondents: 14 lessees.
    Total Estimated Number of Annual Responses: 267.
    Estimated Completion Time per Response: 9 hours.
    Total Estimated Number of Annual Burden Hours: 2,451 hours.
    Respondent's Obligation: Mandatory.
    Frequency of Collection: Annually, monthly, and on occasion.
    Total Estimated Annual Nonhour Burden Cost: None.
    All fourteen lessees report monthly because all current NPSLs are 
in producing status. Because the requirements for establishment of 
capital accounts at Sec.  1220.010(a) and capital account annual 
reporting at Sec.  1220.031(a) are necessary only during the non-
producing status of a lease, ONRR included only one response annually 
for these requirements, in case a new NPSL is established. We have not 
included in our estimates certain requirements performed in the normal 
course of business that are considered usual and customary. The 
following table shows the estimated annual burden hours by CFR section 
and paragraph.

                                                       Respondents' Estimated Annual Burden Hours
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                                                                                                                             Number of
        Citation 30 CFR Part 1220                      Reporting & recordkeeping requirement                Hour burden       annual       Annual burden
                                                                                                                             responses         hours
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                Part 1220--Accounting Procedures for Determining Net Profit Share Payment for Outer Continental Shelf Oil and Gas Leases
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                                                          Sec.   1220.010 NPSL capital account
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1220.010(a).............................  (a) For each NPSL tract, an NPSL capital account shall be                    1               1               1
                                           established and maintained by the lessee for NPSL operations
                                           . . .
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                                                         Sec.   1220.030 Maintenance of records
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1220.030(a) and (b).....................  (a) Each lessee . . . shall establish and maintain such                      1              14              14
                                           records as are necessary . . .
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                                                   Sec.   1220.031 Reporting and payment requirements
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1220.031(a).............................  (a) Each lessee subject to this part shall file an annual                    1              14              14
                                           report during the period from issuance of the NPSL until the
                                           first month in which production revenues are credited to the
                                           NPSL capital account . . .
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1220.031(b).............................  (b) Beginning with the first month in which production                      13         \1\ 168           2,184
                                           revenues are credited to the NPSL capital account, each
                                           lessee . . . shall file a report for each NPSL, not later
                                           than 60 days following the end of each month . . .
                                                                                                         -----------------------------------------------
1220.031(c).............................  (c) Each lessee subject to this Part 1220 shall submit,                 Burden hours covered under Sec.
                                           together with the report required . . . any net profit share                    1220.031(b).
                                           payment due . . .
                                                                                                         -----------------------------------------------
1220.031(d).............................  (d) Each lessee . . . shall file a report not later than 90                  8              14             112
                                           days after each inventory is taken . . .
1220.031(e).............................  (e) Each lessee . . . shall file a final report, not later                   4              14              56
                                           than 60 days following the cessation of production . . .
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                                                               Sec.   1220.032 Inventories
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1220.032(b).............................  (b) At reasonable intervals, but at least once every three                   1              14              14
                                           years, inventories of controllable materiel shall be taken by
                                           the lessee. Written notice of intention to take inventory
                                           shall be given by the lessee at least 30 days before any
                                           inventory is to be taken so that the Director may be
                                           represented at the taking of inventory . . .
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                                                                 Sec.   1220.033 Audits
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1220.033(b)(1)..........................  (b)(1) When nonoperators of an NPSL lease call an audit in                   2              14              28
                                           accordance with the terms of their operating agreement, the
                                           Director shall be notified of the audit call . . .
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1220.033(b)(2)..........................  (b)(2) If DOI determines to call for an audit, DOI shall                     2              14              28
                                           notify the lessee of its audit call and set a time and place
                                           for the audit . . . The lessee shall send copies of the
                                           notice to the nonoperators on the lease . . .
                                                                                                         -----------------------------------------------

[[Page 47576]]

 
1220.033(e).............................  (e) Records required to be kept under Sec.   1220.030(a) shall    The Office of Regulatory Affairs determined
                                           be made available for inspection by any authorized agent of       that the audit process is exempt from the
                                           DOI . . .                                                       Paperwork Reduction Act of 1995 because ONRR
                                                                                                           staff asks non-standard questions to resolve
                                                                                                                            exceptions.
                                         ---------------------------------------------------------------------------------------------------------------
    Total Burden........................................................................................................             267           2,451
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\1\ (14 NPSL reports x 12 months = 168 reports).

    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.
    ONRR Information Collection Clearance Officer: Armand Southall 
(303) 231-3221.

Authority

    The authorities for this action are the Outer Continental Shelf 
Lands Act Amendments of 1978 (43 U.S.C. 1337) and the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3501 et. seq.).

Gregory J. Gould,
Director for Office of Natural Resources Revenue.
[FR Doc. 2017-22011 Filed 10-11-17; 8:45 am]
 BILLING CODE 4335-30-P