[Federal Register Volume 82, Number 241 (Monday, December 18, 2017)]
[Notices]
[Pages 60034-60038]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-27204]


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DEPARTMENT OF THE INTERIOR

Office of Natural Resources Revenue

[Docket No. ONRR-2011-0008; DS63644000 DR2000000.CH7000 189D0102R2; OMB 
Control Number 1012-0006]


Agency Information Collection Activities: Submission to the 
Office of Management and Budget for Review and Approval; Suspensions 
Pending Appeal and Bonding

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 
January 17, 2018 for the assurance of consideration.

ADDRESSES: You may submit your written comments on this 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 also mail a copy of your comments to Mr. Luis 
Aguilar, Regulatory Specialist, P.O. Box 25165, MS 64400, Denver, 
Colorado 80225-0165, or by email to [email protected]. Please 
reference ``OMB Control Number 1012-0006'' in your comments.

FOR FURTHER INFORMATION CONTACT: For questions on technical issues, 
contact Ms. Kimberly Werner, Office of Enforcement and Appeals (OEA), 
ONRR, at (303) 231-3801 or email to [email protected]. For other 
questions, contact Mr. Luis Aguilar, at (303) 231-3418, or email to 
[email protected]. You may also contact Mr. Aguilar, at no cost, of 
(1) the ICR, (2) any associated forms, and (3) 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 June 19, 2017 (82 FR 27868). We received the following 
comments in response to the notice: ``We respectfully offer the 
following scenario on this process from start to finish: (1) Upon 
demand letter from the ONRR, Fieldwood Energy responds with 
correspondence requesting the ONRR accept Area-Wide Bonds currently 
filed with the BOEM for our various entities, which incidentally total 
excess of $23 million, to secure the nominal Administrative Appeals in 
lieu of separate specific Appeal bonds. It should be noted that none of 
the monetary demands from ONRR have come close to exceeding $1 million; 
(2) In the event, the use of and Area-Wide bond is rejected by ONRR, 
Fieldwood then must approach the commercial surety market to negotiate 
terms with prospective sureties for the amount required by ONRR--this 
may entail the production of recent financial information as well as 
operational plans on Fieldwood leading up to several calls and 
discussions with the surety. This may also require the establishment of 
new relationships with sureties who do not know our company--all of 
which is time consuming and not done overnight; and (3) Ultimately, 
Fieldwood obtains a surety bond and files it with your office. So, it 
is quite customary for this process to take days and not several hours 
of our staff's time.
    ``The two burden hours for the majority of the typical requests 
received are adequate. On some occasions, we might have to have a 
little more internal dialogue or research if we do not have all the 
information for the appeal upfront. Generally, those requests fall in 
the 2-4 hour burden. For the most part, however, 2 hours is generally 
the amount of burden hours needed. There again, for clarification, this 
is the internal burden time for our staff. It would take generally 48-
72 hours for our surety to turn around the request.
    ``For WPX who has an existing surety bond line, 2 hours are 
probably sufficient labor hours. However, for

[[Page 60035]]

companies that do not have bond line or have used up their capacity, 
the amount of time spent securing the security bond could take much 
longer.''
    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 
responsibilities are to manage mineral resources production from 
Federal and Indian lands and the OCS, collect the royalties and other 
mineral revenues due, and distribute the funds collected. The Secretary 
also has a trust responsibility to manage Indian lands and seek advice 
and input from Indian beneficiaries. ONRR performs the royalty 
management functions and assists the Secretary in carrying out the 
Department's responsibility for Indian lands. We have posted those laws 
pertaining to mineral leases on Federal and Indian lands and the OCS at 
http://onrr.gov/Laws_R_D/PubLaws/default.htm.

I. General Information

    If ONRR determines that a lessee has not properly reported or paid 
royalties and other mineral revenues, we may issue an order to pay 
additional royalties, a Notice of Noncompliance, or a Civil Penalty 
Notice requiring correct reporting or payment. Lessees then have a 
right to appeal ONRR determinations.
    Implementing regulations at 30 CFR part 1243 govern the suspension 
of orders or decisions and to stay the accrual of civil penalties (if 
the Office of Hearings and Appeals grants a lessee's petition to stay 
accrual of civil penalties), pending administrative appeal for Federal 
leases. These regulations require an appellant to submit information 
demonstrating financial solvency in lieu of providing a surety. For 
those appellants who are not financially solvent or for appeals 
involving Indian leases, ONRR requires appellants to post a surety 
instrument to secure the financial interest of the public and Indian 
lessors during the entire administrative or judicial appeal process. 
This ICR covers the burden hours that appellants incur when submitting 
the financial statements or surety instruments, subject to annual 
audit, that are required to stay an ONRR order, decision, or accrual of 
civil penalties.

II. Information Collections

    Title 30 CFR 1243.1 states that lessees or recipients of ONRR 
orders may suspend compliance with an order if they appeal under 30 CFR 
part 1290. Pending appeal, ONRR may suspend the payment requirement if 
the appellant submits a formal agreement of payment in case of default 
such as a bond or other surety; for Federal oil and gas leases, the 
appellant may demonstrate financial solvency. If the Office of Hearings 
and Appeals grants a lessee's, or other recipient of a Notice of 
Noncompliance or Civil Penalty Notice, request to stay the accrual of 
civil penalties under 30 CFR 1241.55(b)(2) and 1241.63(b)(2), the 
lessee or other recipient must post a bond or other surety, or for 
Federal oil and gas leases, demonstrate financial solvency.
    ONRR accepts the following surety types: form ONRR-4435, 
Administrative Appeal Bond; form ONRR-4436, Letter of Credit; form 
ONRR-4437, Assignment of Certificate of Deposit; Self-bonding; and U.S. 
Treasury Securities.
    When an appellant selects and puts one of the surety types in 
place, the appellant must maintain the surety until completion of the 
appeal. If the appeal is decided in favor of the appellant, ONRR 
returns the surety to the appellant. If the appeal is decided in favor 
of ONRR, then we will take action to collect the total amount due or 
draw down on the surety. We draw down on a surety if the appellant 
fails to comply with requirements relating to the amount due, 
timeframe, or surety submission or resubmission. Whenever ONRR must 
draw down on a surety, we must draw down the total amount due, which is 
defined as unpaid principal plus the interest accrued to the projected 
receipt date of the surety payment. Appellants may refer to the Surety 
Instrument Posting Instructions, which are at http://www.onrr.gov/compliance/appeals.htm.

Forms and Other Surety Types

Form ONRR-4435 [Administrative Appeal Bond]

    Appellants may file form ONRR-4435, Administrative Appeal Bond, 
which ONRR uses to secure the financial interests of the public and 
Indian lessors during the entire administrative and judicial appeal 
process. Under 30 CFR 1243.4, appellants must submit their contact and 
surety amount information on the bond to obtain the benefit of 
suspension of an obligation to comply with an order. A surety company 
that the U.S. Department of the Treasury approves (see Department of 
the Treasury Circular No. 570, as revised periodically in the Federal 
Register) must issue the bond. The ONRR Director or the ONRR-delegated 
bond-approving officer maintains these bonds in a secure facility. 
After the appeal has concluded, ONRR may release and return the bond to 
the appellant or collect payment on the bond. If collection is 
necessary for a remaining balance, ONRR will issue a demand for payment 
to the surety company with a notice to the appellant. We also will 
include all interest accrued on the affected bill.

Form ONRR-4436 [Letter of Credit]

    Appellants may choose to file form ONRR-4436, Letter of Credit 
(LOC), with no modifications. Requirements at 30 CFR 1243.4 continues 
to apply. The ONRR Director or the ONRR-delegated bond-approving 
officer maintains the LOC in a secure facility.
    The appellant is responsible for verifying that the bank provides a 
current Fitch rating to ONRR. After the appeal has been concluded, ONRR 
may release and return the LOC to the appellant or collect payment on 
the LOC. If collection is necessary for a remaining balance, we will 
issue a demand for payment, which includes all interest assessed on the 
affected bill, to the bank with a notice to the appellant.

Form ONRR-4437 [Assignment of Certificate of Deposit]

    Appellants may choose to secure a debt using a Certificate of 
Deposit (CD) from a bank with the required minimum Fitch rating and by 
submitting form ONRR-4437, Assignment of Certificate of Deposit. 
Appellants must file the

[[Page 60036]]

request with ONRR prior to the invoice due date. We will accept a book-
entry CD that explicitly assigns the CD to the Director. If collection 
of the CD is necessary for an unpaid balance, we will return unused CD 
funds to the appellant after total settlement of the appealed issues 
including applicable interest charges.

Self-Bonding

    For Federal oil and gas leases, regulations at 30 CFR 1243.201 
provides that no surety instrument is required when a person 
representing the appellant periodically demonstrates to the 
satisfaction of ONRR, that the guarantor or appellant is financially 
solvent or otherwise able to pay the obligation. Appellants must submit 
a written request to ``self-bond'' every time a new appeal is filed. To 
evaluate the financial solvency and exemption from requirements of 
appellants to maintain a surety related to an appeal, ONRR requires 
appellants to submit a consolidated balance sheet subject to annual 
audit. In some cases, we also require copies of the most recent tax 
returns (up to 3 years) that appellants file.
    In addition, appellants must annually submit financial statements, 
subject to audit, to support their net worth. ONRR uses the 
consolidated balance sheet or business information supplied to evaluate 
the financial solvency of a lessee, designee, or payor seeking a stay 
of payment obligation pending review. If appellants do not have a 
consolidated balance sheet documenting their net worth or if they do 
not meet the $300 million net worth requirement, ONRR selects a 
business information or credit reporting service to provide information 
concerning an appellant's financial solvency. We charge the appellant a 
$50 fee each time we need to review data from a business information or 
credit reporting service. The fee covers our costs in determining an 
appellant's financial solvency.

U.S. Treasury Securities

    Appellants may choose to secure their debts by requesting to use a 
U.S. Treasury Security (TS). Appellants must file the letter of request 
with ONRR prior to the invoice due date. The TS must be a U.S. Treasury 
note or bond with maturity equal to or greater than 1 year. The TS must 
equal 120 percent of the appealed amount plus 1 year of estimated 
interest (necessary to protect ONRR against interest rate 
fluctuations). ONRR only accepts a book-entry TS.

III. OMB Approval

    The information we collect under this ICR is essential in order to 
require response from appellants to suspend compliance with an order 
pending appeal.
    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 also may result 
in loss of royalty and other payments. ONRR protects the proprietary 
information received and does not collect items of a sensitive nature 
in this ICR.

IV. Data

    Title: Suspensions Pending Appeal and Bonding, 30 CFR part 1243.
    OMB Control Number: 1012-0006.
    Bureau Form Numbers: ONRR-4435, ONRR-4436, and ONRR-4437.
    Type of Review: Extension of a currently approved collection.
    Respondents/Affected Public: Businesses.
    Total Estimated Number of Annual Respondents: 105 Federal or Indian 
appellants.
    Total Estimated Number of Annual Responses: 105.
    Estimated Completion Time per Response: 2 hours.
    Total Estimated Number of Annual Burden Hours: 210 hours.
    Respondent's Obligation: Mandatory.
    Frequency of Collection: Annually and on occasion.
    Total Estimated Annual Nonhour Burden Cost: There are no additional 
recordkeeping costs associated with this ICR. However, ONRR estimates 
that five appellants per year will pay a $50 fee to obtain credit data 
from a business information or credit reporting service, which is a 
total ``non-hour'' cost burden of $250 per year (5 appellants per year 
x $50 = $250).
    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 burden hours by 
CFR section and paragraph:

                                   Respondents' Estimated Annual Burden Hours
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                                  Reporting and
   Citation 30 CFR part 1243      recordkeeping     Hour burden      Average number of annual      Annual burden
                                   requirement                               responses                 hours
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1243.4(a)(1)...................  How do I                      2  40............................              80
                                  suspend
                                  compliance
                                  with an order?.
                                 (a) If you       ..............  (Forms ONRR-4435, ONRR-4436,
                                  timely appeal                    ONRR-4437; or TS).
                                  an order, and
                                  if that order
                                  or portion of
                                  that order:
                                  (1) Requires
                                  you to make a
                                  payment, and
                                  you want to
                                  suspend
                                  compliance
                                  with that
                                  order, you
                                  must post a
                                  bond or other
                                  surety
                                  instrument or
                                  demonstrate
                                  financial
                                  solvency * * *
                                                 ---------------------------------------------------------------
1243.6.........................  When must I or           Burden hours covered under Sec.   1243.4(a)(1).
                                  another person
                                  meet the
                                  bonding or
                                  financial
                                  solvency
                                  requirements
                                  under this
                                  part?
                                 If you must
                                  meet the
                                  bonding or
                                  financial
                                  solvency
                                  requirements
                                  under Sec.
                                  1243.4(a)(1),
                                  or if another
                                  person is
                                  meeting your
                                  bonding or
                                  financial
                                  solvency
                                  requirements,
                                  then either
                                  you or the
                                  other person
                                  must post a
                                  bond or other
                                  surety
                                  instrument or
                                  demonstrate
                                  financial
                                  solvency
                                  within 60 days
                                  after you
                                  receive the
                                  order or the
                                  Notice of
                                  Order.
                                                 ---------------------------------------------------------------
1243.7(a)......................  What must a              Burden hours covered under Sec.   1243.4(a)(1).
                                  person do when
                                  posting a bond
                                  or other
                                  surety
                                  instrument or
                                  demonstrating
                                  financial
                                  solvency on
                                  behalf of an
                                  appellant?

[[Page 60037]]

 
                                 If you assume
                                  an appellant's
                                  responsibility
                                  to post a bond
                                  or other
                                  surety
                                  instrument or
                                  demonstrate
                                  financial
                                  solvency * * *
                                  (a) Must
                                  notify ONRR in
                                  writing * * *
                                  that you are
                                  assuming the
                                  appellant's
                                  responsibility
                                  * * *
                                                 ---------------------------------------------------------------
1243.8(a)(2) and (b)(2)........  When will ONRR           Burden hours covered under Sec.   1243.4(a)(1).
                                  suspend my
                                  obligation to
                                  comply with an
                                  order?
                                 (a) Federal
                                  leases. * * *
                                  (2) If the
                                  amount under
                                  appeal is
                                  $10,000 or
                                  more, ONRR
                                  will suspend
                                  your
                                  obligation to
                                  comply with
                                  that order if
                                  you:
                                 (i) Submit an
                                  ONRR-specified
                                  surety
                                  instrument
                                  under subpart
                                  B of this part
                                  within a time
                                  period ONRR
                                  prescribes; or
                                 (ii)
                                  Demonstrate
                                  financial
                                  solvency under
                                  subpart C.
                                 (b) Indian
                                  leases. * * *
                                  (2) If the
                                  amount under
                                  appeal is
                                  $1,000 or
                                  more, ONRR
                                  will suspend
                                  your
                                  obligation to
                                  comply with
                                  that order if
                                  you submit an
                                  ONRR-specified
                                  surety
                                  instrument
                                  under subpart
                                  B of this part
                                  within a time
                                  period ONRR
                                  prescribes.
                                                 ---------------------------------------------------------------
1243.101(b)....................  How will ONRR            Burden hours covered under Sec.   1243.4(a)(1).
                                  determine the
                                  amount of my
                                  bond or other
                                  surety
                                  instrument?
                                 * * * (b) If
                                  your appeal is
                                  not decided
                                  within 1 year
                                  from the
                                  filing date,
                                  you must
                                  increase the
                                  surety amount
                                  to cover
                                  additional
                                  estimated
                                  interest for
                                  another 1-year
                                  period. You
                                  must continue
                                  to do this
                                  annually * * *
                                                 ---------------------------------------------------------------
1243.200(a) and (b)............  How do I                      2  65............................             130
                                  demonstrate
                                  financial
                                  solvency?.
                                 (a) To           ..............  (Self-bonding submissions)....
                                  demonstrate
                                  financial
                                  solvency under
                                  this part, you
                                  must submit an
                                  audited
                                  consolidated
                                  balance sheet,
                                  and, if
                                  requested by
                                  the ONRR bond-
                                  approving
                                  officer, up to
                                  3 years of tax
                                  returns to the
                                  ONRR, * * *
                                 (b) You must
                                  submit an
                                  audited
                                  consolidated
                                  balance sheet
                                  annually, and,
                                  if requested,
                                  additional
                                  annual tax
                                  returns on the
                                  date ONRR
                                  first
                                  determined
                                  that you
                                  demonstrated
                                  financial
                                  solvency as
                                  long as you
                                  have active
                                  appeals, or
                                  whenever ONRR
                                  requests. * *
                                  *
                                                 ---------------------------------------------------------------
1243.201(c)(1), (c)(2)(i) and    How will ONRR       Burden hours covered under Sec.  Sec.   1243.4(a)(1) and
 (c)(2)(ii) and (d)(2).           determine if I                        1243.200(a) and (b)
                                  am financially
                                  solvent?.
                                 * * * (c) If
                                  your net
                                  worth, minus
                                  the amount we
                                  would require
                                  as surety
                                  under subpart
                                  B for all
                                  orders you
                                  have appealed
                                  is less than
                                  $300 million,
                                  you must
                                  submit * * *
                                 (1) A written
                                  request asking
                                  us to consult
                                  a business-
                                  information,
                                  or credit-
                                  reporting
                                  service or
                                  program to
                                  determine your
                                  financial
                                  solvency; and
                                 (2) A
                                  nonrefundable
                                  $50 processing
                                  fee:
                                 (i) You must
                                  pay the
                                  processing fee
                                  * * *;
                                 (ii) You must
                                  submit the fee
                                  with your
                                  request * * *
                                  and then
                                  annually on
                                  the date we
                                  first
                                  determined
                                  that you
                                  demonstrated
                                  financial
                                  solvency, as
                                  long as you
                                  are not able
                                  to demonstrate
                                  financial
                                  solvency * * *
                                  and you have
                                  active appeals.
                                 (d)* * * (2)
                                  For us to
                                  consider you
                                  financially
                                  solvent, the
                                  business-
                                  information or
                                  credit-reporti
                                  ng service or
                                  program must
                                  demonstrate
                                  your degree of
                                  risk as low to
                                  moderate: * *
                                  *
                                                 ---------------------------------------------------------------
1243.202(c)....................  When will ONRR           Burden hours covered under Sec.   1243.4(a)(1).
                                  monitor my
                                  financial
                                  solvency?.
                                 * * * (c) If
                                  our bond-
                                  approving
                                  officer
                                  determines
                                  that you are
                                  no longer
                                  financially
                                  solvent, you
                                  must post a
                                  bond or other
                                  ONRR-specified
                                  surety
                                  instrument
                                  under subpart
                                  B.
                                                 ---------------------------------------------------------------
    Total Burden...............  ...............  ..............  105...........................             210
----------------------------------------------------------------------------------------------------------------


[[Page 60038]]

    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: Luis Aguilar (303) 
231-3418.

    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. 2017-27204 Filed 12-15-17; 8:45 am]
 BILLING CODE 4335-30-P