[Federal Register Volume 83, Number 241 (Monday, December 17, 2018)]
[Notices]
[Pages 64588-64597]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27259]


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DEPARTMENT OF THE INTERIOR

Office of Natural Resources Revenue

[Docket No. ONRR-2011-0021; DS63644200 DRT000000.CH7000 190D1113RT; OMB 
Control Number 1012-0002]


Agency Information Collection Activities: Submission to the 
Office of Management and Budget for Review and Approval; Indian Oil & 
Gas Valuation

AGENCY: Office of the Secretary; Office of Natural Resources Revenue, 
Interior.

ACTION: Notice of information collection; request for comment.

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SUMMARY: In accordance with the Paperwork Reduction Act of 1995 (PRA), 
the Office of Natural Resources Revenue (ONRR), is proposing to renew 
an information collection with revisions. ONRR seeks renewed authority 
to collect information from lessees using five forms necessary to 
determine the correct royalties to be collected on behalf of Indian 
Tribes and individual Indian mineral owners. Revisions from the prior 
approval to collect this information are necessary because the 
information collection requirements on form ONRR-4410 were reduced by a 
rule in 2015.

DATES: Interested persons are invited to submit written comments on or 
before January 16, 2019.

ADDRESSES: Send 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 
by facsimile to (202) 395-5806. Please provide a copy of your comments 
to Mr. Armand Southall, Regulatory Specialist, ONRR, P.O. Box 25165, MS 
64400B, Denver, Colorado 80225-0165; or by email to 
[email protected]. Please reference ``OMB Control Number 1012-
0002'' in the subject line of your comments.

FOR FURTHER INFORMATION CONTACT: To request additional information 
about this ICR, contact Ms. Lee-Ann Martin, telephone at (303) 231-
3313, or email to [email protected]. You may also view the ICR at 
http://www.reginfo.gov/public/do/PRAMain.

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 for this collection of information, in the Federal 
Register on July 11, 2018 (83 FR 32141). During the 60-day period, we 
specifically reached out to five companies impacted by this ICR to 
request input. In response to the outreach, we received three 
responsive comments.
    The first comment we received stated the following:
    ``We do not have an update to provide on the estimate burden. We 
can offer comment in regards to the industry submission process of the 
related forms referenced in the ICR (ONRR-4109, ONRR-4110, ONRR-4295, 
ONRR-4393, ONRR-4410 and ONRR-4411) with regard to the use of 
technology. Value can be added to both industry and ONRR by eliminating 
the paper submission form and having the company submit the form via 
the ONRR online system. When the request is submitted, ONRR staff 
should review and approve that will notate the date and name of 
approver. This submission should also be available to pull and view 
online through the dwportal.onrr.gov website History Database/Report 
tool. Currently, if a company wanted to verify the forms submitted to 
ONRR, they would have to contact them directly and they would pull a 
report and send to the company.''
    The second comment we received stated the following:
    ``I'm sorry I haven't gotten back to you on this. I read through 
the document and I didn't see any burden estimates that I thought were 
far enough off to make official comment on. The burden estimates for 
each case probably run high when things are running smoothly, and run 
low when a big problem presents itself. I'm sorry I can't be of more 
help.''
    The third comment we received stated the following:
    ``We do not have comments to submit at this time.''
    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 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 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 the 
royalties and other mineral revenues due, and distribute the funds 
collected. The Secretary also has 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. By collecting information from the 
records of the lessee or others

[[Page 64589]]

involved in developing, transporting, processing, purchasing, or 
selling of such minerals, we ensure that lessees accurately value 
production and appropriately pay royalties. Public laws pertaining to 
mineral leases on Federal and Indian lands and the OCS are available at 
https://www.onrr.gov/Laws_R_D/PubLaws/index.htm.
    The information collections that we cover in this ICR involve five 
forms, forms ONRR-4109, ONRR-4110, ONRR-4295, ONRR-4410, and ONRR-4411. 
References to these forms, and form ONRR-4393, which is approved under 
OMB Control Number 1012-0005, are identified in: 30 CFR part 1202, 
subparts C and J, which pertain to Indian oil and gas 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 Valuation

    Regulations at title 30 CFR part 1206, subpart B, govern the 
valuation for royalty purposes of oil produced from Indian oil and gas 
leases (Tribal and allotted), 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. Transportation allowances may also be 
available to the lessee.
    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 non-arm's-length 
contract or no contract situations.

Indian Gas Valuation

    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 require reporting on 
the four forms that are the subject of this ICR, forms ONRR-4109, ONRR-
4295, ONRR-4410, and ONRR-4411:

     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 royalties.
     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.
     Lessees use form ONRR-4410, Accounting for Comparison 
(Dual Accounting), to certify that dual accounting is not required 
on an Indian lease or to make an election for actual or alternative 
dual accounting for Indian leases. Most Indian leases contain the 
requirement to perform accounting for comparison (dual accounting) 
for gas produced from the lease. Therefore, 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.
     The regulations require that lessees 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.

    This ICR also allows ONRR to collect information to support a 
lessee's request for exclusion or the termination of exclusion under 30 
CFR 1206.174. An Indian Tribe may ask ONRR to exclude some or all of 
its leases from valuation under this section. ONRR will consult with 
Bureau of Indian Affairs regarding the Tribe's request. If ONRR 
approves the request for the Tribal lease, the lessee must value the 
production as specified in Sec.  1206.174. The lessee may ask ONRR for 
guidance in determining value and may propose a valuation method to 
ONRR. The lessee must submit all available data related to the proposal 
and any additional information that ONRR deems necessary.
    In addition, this ICR allows ONRR, under 30 CFR 1206.175, to 
collect information to support a lessee's request to report royalties 
based on the volumes allocable to its lease acreage under the terms of 
an approved Federal agreement. Under this section, a lessee may also 
submit information to support a request for ONRR to approve other 
methods for determining the quantity of residue gas and gas plant 
products allocable to each lease.

Indian Oil and Gas

    Regulations at 30 CFR 1206.56(b)(2) and 1206.177(c)(2) and (c)(3) 
govern the valuation for royalty purposes of oil and gas produced from 
Indian oil and gas leases (Tribal and allotted), and are consistent 
with mineral leasing laws, other applicable laws, and lease terms. 
These regulations require reporting on one form--that is also the 
subject of this ICR--form ONRR-4393.
    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 
for this form are incurred on Federal leases; therefore, OMB approved 
this form under OMB Control Number 1012-0005 titled Federal Oil and Gas 
Valuation, which pertains to Federal oil and gas leases. However, we 
include a discussion of this form in this ICR, as well as the burden 
hours for Indian leases. To request permission to exceed a regulatory 
allowance limit, lessees must (1) submit a letter to ONRR explaining 
why a higher allowance limit is necessary; and (2) provide supporting 
documentation, including a completed form ONRR-4393. This form provides 
ONRR with the data necessary to make a decision whether to approve or 
deny the request and track deductions on subsequent royalty reports.

Revisions to ICR

    This is an ICR with revisions because it takes into account the 
final rule published May 1, 2015, which amended ONRR's Indian oil 
valuation regulations (80 FR 24794). This ICR requires minor revisions 
to note changes to its authority when the final rule amended 30 CFR 
part 1206, subpart B. The two changes relevant to this ICR are that the 
amendment eliminated: (1) The form ONRR-4110 filing requirements for 
arm's-length transportation allowance; and (2) the pre-filing of form 
ONRR-4110 prior to claiming a non-arm's-length transportation 
allowance. The final rule noted that OMB approved a total of 220 burden 
hours for lessees to submit their respective form ONRR-4110 under this 
ICR--OMB Control Number 1012-0002. It also noted that ``there will be 
no additional burden hours because this rule will insignificantly 
reduce the burden hours

[[Page 64590]]

associated with the Oil Transportation Allowance Report.'' Under the 
revised Indian oil valuation regulations, rather than submitting 
estimated transportation cost information on the form and then 
following up with actual cost information at the end of the reporting 
cycle, lessees need only to provide actual cost information. Also, 
lessees that have arm's-length transportation costs are no longer 
required to submit form ONRR-4110 to report these costs, but will, 
instead, submit copies of the actual contracts to ONRR.

OMB Approval

    We are requesting OMB's approval to continue to collect this 
information, with revisions. 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 the 
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. The lessees 
are required to report on forms ONRR-4109, ONRR-4110, ONRR-4295, and 
ONRR-4393 in order to obtain a benefit.
    Title of Collection: Indian Oil and Gas Valuation, 30 CFR parts 
1202, 1206, and 1207.
    OMB Control Number: 1012-0002.
    Form Numbers: ONRR-4109, ONRR-4110, ONRR-4295, ONRR-4410, and ONRR-
4411.
    Type of Review: Revision of a currently approved collection.
    Respondents/Affected Public: Businesses.
    Total Estimated Number of Annual Respondents: 146 lessees of Indian 
leases.
    Total Estimated Number of Annual Responses: 146.
    Estimated Completion Time per Response: 8.9 hours.
    Total Estimated Number of Annual Burden Hours: 1,299 hours.
    Respondent's Obligation: Mandatory, or Required to Obtain or Retain 
a Benefit.
    Frequency of Collection: Annually and on occasion.
    Total Estimated Annual Nonhour Burden Cost: None.
    We have not included in our estimates certain requirements 
performed in the normal course of business and considered usual and 
customary. The following chart shows the estimated burden hours by CFR 
section and paragraph:

                                   Respondents' Estimated Annual Burden Hours
----------------------------------------------------------------------------------------------------------------
                                                                                  Average number
            30 CFR                 Reporting and recordkeeping      Hour burden      of annual     Annual burden
                                           requirement                               responses         hours
----------------------------------------------------------------------------------------------------------------
                                              Part 1202--ROYALTIES
                                        Subpart C--Federal and Indian Oil
----------------------------------------------------------------------------------------------------------------
1202.101......................  Standards for reporting and         Burden covered under Sec.   1210.52 in OMB
                                 paying royalties. Report oil                Control Number 1012-0004.
                                 volumes in barrels of clean oil
                                 of 42 standard U.S. gallons
                                 (231 cubic inches each) at 60
                                 [deg]F.
----------------------------------------------------------------------------------------------------------------
                                  Subpart J--Gas Production From Indian Leases
----------------------------------------------------------------------------------------------------------------
1202.551(b)...................  How do I determine the volume of    Burden covered under Sec.   1210.52 in OMB
                                 production for which I must pay             Control Number 1012-0004.
                                 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)...................  You and all other persons paying               1               1               1
                                 royalties on the lease may ask
                                 ONRR for permission to report
                                 and pay royalties based on your
                                 entitlements * * *.
----------------------------------------------------------------------------------------------------------------
1202.558(a) and (b)...........  What standards do I use to          Burden covered under Sec.   1210.52 in OMB
                                 report and pay royalties on                 Control Number 1012-0004.
                                 gas? (a) You must report gas
                                 volumes * * * (b) You must
                                 report residue gas and gas
                                 plant product volumes * * *.
----------------------------------------------------------------------------------------------------------------
                                          Part 1206--PRODUCT VALUATION
                                              Subpart B--Indian Oil
----------------------------------------------------------------------------------------------------------------
1206.56(b)(2).................  What general transportation                    4               1               4
                                 allowance requirements apply to
                                 me? * * * (2) Upon your
                                 request, 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 *
                                 * *.
----------------------------------------------------------------------------------------------------------------

[[Page 64591]]

 
1206.57(a)(1), (2), and (3)...  How do I determine a                         AUDIT PROCESS. See note.
                                 transportation allowance if I
                                 have an arm's-length
                                 transportation contract? Arm's-
                                 length transportation. (a)(1) *
                                 * * You have the burden of
                                 demonstrating that your
                                 contract is arm's-length. (2)
                                 You must 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 that ONRR receives
                                 your report, which claims the
                                 allowance on form ONRR-2014.
                                 (3) * * * 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)(4)(i)..............  * * * Except as provided in this    Burden covered under Sec.   1206.57(a)(5).
                                 paragraph, you may not take an
                                 allowance for the costs of
                                 transporting lease production,
                                 which is not royalty-bearing,
                                 without ONRR's approval.
----------------------------------------------------------------------------------------------------------------
1206.57(a)(4)(ii).............  Notwithstanding the requirements              20               1              20
                                 of paragraph (a)(4)(i) of this
                                 section, you may propose to
                                 ONRR a cost allocation method
                                 on the basis of the values of
                                 the products transported * * *.
----------------------------------------------------------------------------------------------------------------
1206.57(a)(5).................  If an arm's-length                            40               1              40
                                 transportation contract
                                 includes both gaseous and
                                 liquid products, and the
                                 transportation costs
                                 attributable to each product
                                 cannot be determined from the
                                 contract, you must propose an
                                 allocation procedure to ONRR *
                                 * *.
----------------------------------------------------------------------------------------------------------------
1206.57(a)(5)(ii).............  You must submit to ONRR all                  AUDIT PROCESS. See note.
                                 available data to support your
                                 proposal.
----------------------------------------------------------------------------------------------------------------
1206.57(a)(5)(iii)............  You must submit your initial                   4               1               4
                                 proposal within 3 months after
                                 the last day of the month for
                                 which you request a
                                 transportation allowance,
                                 whichever is later (unless ONRR
                                 approves a longer period).
----------------------------------------------------------------------------------------------------------------
1206.57(b)(1).................  Reporting requirements. If ONRR              AUDIT PROCESS. See note.
                                 requests, you must submit all
                                 data used to determine your
                                 transportation allowance * * *.
----------------------------------------------------------------------------------------------------------------
1206.57(b)(2).................  You must report transportation      Burden covered under Sec.   1210.52 in OMB
                                 allowances as a separate entry              Control Number 1012-0004.
                                 on form ONRR-2014 * * *.
----------------------------------------------------------------------------------------------------------------
1206.58(a)(1).................  How do I determine a                         AUDIT PROCESS. See note.
                                 transportation allowance if I
                                 have a non-arm's-length
                                 transportation contract or have
                                 no contract? Non-arm's-length
                                 or no contract. If you have a
                                 non-arm's-length transportation
                                 contract or no contract,
                                 including those situations
                                 where you or your affiliate
                                 perform(s) transportation
                                 services for you, the
                                 transportation allowance is
                                 based on your reasonable,
                                 actual costs.
----------------------------------------------------------------------------------------------------------------
1206.58(a)(2).................  You must submit the actual cost                6               1               6
                                 information to support the
                                 allowance to ONRR on form ONRR-
                                 4110, Oil Transportation
                                 Allowance Report, within 3
                                 months after the end of the
                                 calendar year to which the
                                 allowance applies * * *.
----------------------------------------------------------------------------------------------------------------
1206.58(a)(3)(iv).............  * * * After you have elected to               20               1              20
                                 use either method for a
                                 transportation system, you may
                                 not later elect to change to
                                 the other alternative without
                                 approval of ONRR.
----------------------------------------------------------------------------------------------------------------
1206.58(a)(3)(iv)(A)..........  * * * After you make an                       20               1              20
                                 election, you may not change
                                 methods without ONRR's approval
                                 * * *.
----------------------------------------------------------------------------------------------------------------
1206.58(a)(4)(i)..............  * * * Except as provided in this              40               1              40
                                 paragraph (a)(4)(i), you may
                                 not take an allowance for
                                 transporting lease production
                                 that is not royalty bearing
                                 without ONRR's approval.
----------------------------------------------------------------------------------------------------------------
1206.58(a)(4)(ii).............  Notwithstanding the requirements              20               1              20
                                 of paragraph (a)(4)(i) of this
                                 section, you may propose to
                                 ONRR a cost allocation method
                                 on the basis of the values of
                                 the products transported * * *.
----------------------------------------------------------------------------------------------------------------

[[Page 64592]]

 
1206.58(a)(5)(ii) and (iii)...  Where both gaseous and liquid                 20               1              20
                                 products are transported
                                 through the same transportation
                                 system, you must propose a cost
                                 allocation procedure to ONRR *
                                 * * (ii) You must submit to
                                 ONRR all available data to
                                 support your proposal. * * *
                                 (iii) You must submit your
                                 initial proposal within 3
                                 months after the last day of
                                 the month for which you request
                                 a transportation allowance
                                 (unless ONRR approves a longer
                                 period).
----------------------------------------------------------------------------------------------------------------
1206.58(a)(6).................  You may apply to ONRR for an                  20               1              20
                                 exception from the requirement
                                 that you compute actual costs
                                 under paragraphs (a)(1) through
                                 (5) of this section.
----------------------------------------------------------------------------------------------------------------
1206.58(b)(1).................  Reporting requirements. If ONRR              AUDIT PROCESS. See note.
                                 requests, you must submit all
                                 data used to determine your
                                 transportation allowance, You
                                 must provide the data within a
                                 reasonable period of time that
                                 ONRR will determine.
----------------------------------------------------------------------------------------------------------------
1206.58(b)(2).................  You must report transportation      Burden covered under Sec.   1210.52 in OMB
                                 allowances as a separate entry              Control Number 1012-0004.
                                 on form ONRR-2014 * * *.
----------------------------------------------------------------------------------------------------------------
1206.58(b)(3).................  ONRR may require you to submit               AUDIT PROCESS. See note.
                                 all of the data that you used
                                 to prepare your form ONRR-4110.
                                 You must submit the data within
                                 a reasonable period of time
                                 that ONRR determines.
----------------------------------------------------------------------------------------------------------------
1206.59(a)....................  What interest applies if I          Burden covered under Sec.   1210.52 in OMB
                                 improperly report a                         Control Number 1012-0004.
                                 transportation allowance? If
                                 you deduct a transportation
                                 allowance on form ONRR-2014
                                 without complying with the
                                 requirements of Sec.  Sec.
                                 1206.56 and 1206.57 or Sec.
                                 1206.58, you must pay
                                 additional royalties due plus
                                 late payment interest
                                 calculated under Sec.   1218.54
                                 of this chapter.
----------------------------------------------------------------------------------------------------------------
1206.60(a)....................  What reporting adjustments must     Burden covered under Sec.   1210.52 in OMB
                                 I make for transportation                   Control Number 1012-0004.
                                 allowances? If your actual
                                 transportation allowance is
                                 less than the amount that you
                                 claimed on form ONRR-2014 for
                                 each month during the allowance
                                 reporting period, you must pay
                                 additional royalties due, plus
                                 late payment interest
                                 calculated under Sec.   1218.54
                                 of this chapter.
----------------------------------------------------------------------------------------------------------------
1206.60(c)....................  If you make an adjustment under     Burden covered under Sec.   1210.52 in OMB
                                 paragraph (a) or (b) of this                Control Number 1012-0004.
                                 section, then you must submit a
                                 corrected form ONRR-2014 to
                                 reflect actual costs, together
                                 with any payment, using
                                 instructions that ONRR provides.
----------------------------------------------------------------------------------------------------------------
1206.61(a)(2).................  How will ONRR determine if my       Burden covered under Sec.   1210.52 in OMB
                                 royalty payments are correct? *             Control Number 1012-0004.
                                 * * If ONRR directs you to use
                                 a different royalty value, you
                                 must pay any additional
                                 royalties due plus late payment
                                 interest calculated under Sec.
                                  1218.54 of this chapter.
----------------------------------------------------------------------------------------------------------------
1206.62(a)....................  How do I request a value                      20               1              20
                                 determination? You may request
                                 a value determination from ONRR
                                 regarding any oil produced.
                                 Your request must include: (1)
                                 Be in writing. (2) Identify
                                 specifically all leases
                                 involved, all interest owners
                                 of those leases, the
                                 designee(s), and the
                                 operator(s) for those leases.
                                 (3) Completely explain all
                                 relevant facts. * * * (4)
                                 Include copies of all relevant
                                 documents. (5) Provide your
                                 analysis of the issue(s) * * *
                                 (6) Suggest your proposed
                                 valuation method.
----------------------------------------------------------------------------------------------------------------
1206.62(c)(2).................  After the Assistant Secretary       Burden covered under Sec.   1210.52 in OMB
                                 [for Indian Affairs] issues a               Control Number 1012-0004.
                                 value determination, you must
                                 make any adjustments to royalty
                                 payments that follow from the
                                 determination, and, if you owe
                                 additional royalties, you must
                                 pay the additional royalties
                                 due plus late payment interest
                                 calculated under Sec.   1218.54
                                 of this chapter.
----------------------------------------------------------------------------------------------------------------
1206.64.......................  What records must I keep to                  AUDIT PROCESS. See note.
                                 support my calculations of
                                 value under this subpart? If
                                 you determine the value of your
                                 oil under this subpart, you
                                 must retain all data relevant
                                 to the determination of royalty
                                 value * * *.
----------------------------------------------------------------------------------------------------------------

[[Page 64593]]

 
                                          Part 1206--PRODUCT VALUATION
                                              Subpart E--Indian Gas
----------------------------------------------------------------------------------------------------------------
1206.172(b)(1)(ii)............  How do I value gas produced from               4              58             232
                                 leases in an index zone? (b)
                                 Valuing residue gas and gas
                                 before processing. (1)(ii) Gas
                                 production that you certify on
                                 form ONRR-4410, Certification
                                 for Not Performing Accounting
                                 for comparison (Dual
                                 Accounting), is not processed
                                 before it flows into a pipeline
                                 with an index but which may be
                                 processed later; * * *.
----------------------------------------------------------------------------------------------------------------
1206.172(e)(6)(i) and (iii)...  (e) Determining the minimum                    3              11              33
                                 value for royalty purposes of
                                 gas sold beyond the first index
                                 pricing point.* * * (6)(i) You
                                 must report the safety net
                                 price for each index zone to
                                 ONRR on form ONRR-4411, Safety
                                 Net Report, no later than June
                                 30 following each calendar
                                 year; * * * (iii) ONRR may
                                 order you to amend your safety
                                 net price within one year from
                                 the date your form ONRR-4411 is
                                 due or is filed, whichever is
                                 later * * *.
----------------------------------------------------------------------------------------------------------------
1206.172(e)(6)(ii)............  You must pay and report on form     Burden covered under Sec.   1210.52 in OMB
                                 ONRR-2014 additional royalties              Control Number 1012-0004.
                                 due no later than June 30
                                 following each calendar year *
                                 * *.
----------------------------------------------------------------------------------------------------------------
1206.172(f)(1)(ii), (f)(2),     (f) Excluding some or all tribal              40               1              40
 and (f)(3).                     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 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)................  You must make a separate            Burden covered under Sec.   1206.173(a)(1).
                                 election to use the alternative
                                 methodology for dual accounting
                                 for your Indian leases in each
                                 ONRR-designated area * * *.
----------------------------------------------------------------------------------------------------------------
1206.174(a)(4)(ii)............  How do I value gas production       Burden covered under Sec.   1210.52 in OMB
                                 when an index-based method                  Control Number 1012-0004.
                                 cannot be used? (a) Situations
                                 in which an index-based method
                                 cannot be used. (4)(ii) If the
                                 major portion value is higher,
                                 you must submit an amended form
                                 ONRR-2014 to ONRR by the due
                                 date specified in the written
                                 notice from ONRR of the major
                                 portion value * * *..
----------------------------------------------------------------------------------------------------------------
1206.174(b)(1)(i) and (iii);    (b) Arm's-length contracts. * *              AUDIT PROCESS. See note.
 (b)(2); (d)(2).                 *.
                                (1) The value of gas, residue
                                 gas, or any gas plant product
                                 you sell under an arm's-length
                                 contract is the gross proceeds
                                 accruing to you or your
                                 affiliates * * *.
                                (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 * * *.......

[[Page 64594]]

 
                                (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)...................  Supporting data. If you                      AUDIT PROCESS. See note.
                                 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)...................  Value guidance. You may ask ONRR              40               1              40
                                 for guidance in determining
                                 value. You may propose a
                                 valuation method to ONRR.
                                 Submit all available data
                                 related to your proposal and
                                 any additional information ONRR
                                 deems necessary * * *.
----------------------------------------------------------------------------------------------------------------
1206.175(d)(4)................  How do I determine quantities                 20               1              20
                                 and qualities of production for
                                 computing royalties? (d)(4) * *
                                 * You may request ONRR approval
                                 of other methods for
                                 determining the quantity of
                                 residue gas and gas plant
                                 products allocable to each
                                 lease * * *.
----------------------------------------------------------------------------------------------------------------
1206.176(b)...................  How do I perform accounting for     Burden covered under Sec.   1206.173(a)(1).
                                 comparison? * * * 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)...................  * * * If you do not perform dual             Burden covered under Sec.
                                 accounting, you must certify to                1206.172(b)(1)(ii).
                                 ONRR that gas flows into such a
                                 pipeline before it is processed
                                 * * *.
----------------------------------------------------------------------------------------------------------------
                                            Transportation Allowances
----------------------------------------------------------------------------------------------------------------
1206.177(c)(2) and (c)(3).....  What general requirements           Burden covered under Sec.   1206.56(b)(2).
                                 regarding transportation
                                 allowances apply to me? (c) * *
                                 * (2) If you ask ONRR, ONRR may
                                 approve a transportation
                                 allowance deduction in excess
                                 of the limitation in paragraph
                                 (c)(1) of this section. * * *
                                 (3) Your application for
                                 exception (using form ONRR-
                                 4393, Request to Exceed
                                 Regulatory Allowance
                                 Limitation) must contain all
                                 relevant and supporting
                                 documentation necessary for
                                 ONRR to make a determination.
----------------------------------------------------------------------------------------------------------------
1206.178(a)(1)(i).............  How do I determine a                           1              18              18
                                 transportation allowance? (a)
                                 Determining a transportation
                                 allowance under an arm's-length
                                 contract. (1) This paragraph
                                 explains how to determine your
                                 allowance if you have an arm's-
                                 length transportation contract.
                                 (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)...........  If ONRR determines that the                  AUDIT PROCESS. See note.
                                 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)(2)(i) * * * [Y]ou cannot                  20               1              20
                                 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)....  (3)(i) If your arm's-length                   40               1              40
                                 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 * * *.
----------------------------------------------------------------------------------------------------------------

[[Page 64595]]

 
1206.178(b)(1)(ii)............  (b) Determining a transportation              15               5              75
                                 allowance under a non-arm's-
                                 length contract or no contract.
                                 (1)(ii) You must submit the
                                 actual cost information to
                                 support the allowance to ONRR
                                 on form ONRR-4295, Gas
                                 Transportation Allowance
                                 Report, within 3 months after
                                 the end of the 12-month period
                                 to which the allowance applies
                                 * * *.
----------------------------------------------------------------------------------------------------------------
1206.178(b)(2)(iv)............  You may use either depreciation               20               1              20
                                 with a return on undepreciated
                                 capital investment or a return
                                 on depreciable capital
                                 investment. After you have
                                 elected to use either method
                                 for a transportation system,
                                 you may not later elect to
                                 change to the other alternative
                                 without ONRR approval.
----------------------------------------------------------------------------------------------------------------
1206.178(b)(2)(iv)(A).........  * * * Once you make an election,              20               1              20
                                 you may not change methods
                                 without ONRR approval.
----------------------------------------------------------------------------------------------------------------
1206.178(b)(3)(i).............  * * * Except as provided in this              40               1              40
                                 paragraph, you may not take an
                                 allowance for transporting a
                                 product that is not royalty
                                 bearing without ONRR approval.
----------------------------------------------------------------------------------------------------------------
1206.178(b)(3)(ii)............  As an alternative to the                      20               1              20
                                 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)................  If you transport both gaseous                 40               1              40
                                 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        (d) Reporting your                  Burden covered under Sec.   1210.52 in OMB
 (f)(1).                         transportation allowance. (2)               Control Number 1012-0004.
                                 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 Sec.
                                 1218.54 of this chapter from
                                 the first day of the first
                                 month you deducted the improper
                                 transportation allowance until
                                 the date you pay the royalties
                                 due * * *.
                                (f) Determining allowable costs
                                 for transportation allowances *
                                 * *.
                                (1) Firm demand charges paid to
                                 pipelines. * * * You must
                                 modify the form ONRR-2014 by
                                 the amount received or credited
                                 for the affected reporting
                                 period * * *.
----------------------------------------------------------------------------------------------------------------
                                              Processing Allowances
----------------------------------------------------------------------------------------------------------------
1206.180(a)(1)(i).............  How do I determine an actual                   1               2               2
                                 processing allowance? (a)
                                 Determining a processing
                                 allowance if you have an arm's-
                                 length processing contract.
                                 (1)(i) * * * You have the
                                 burden of demonstrating that
                                 your contract is arm's-length.
                                 You are required to submit to
                                 ONRR a copy of your arm's-
                                 length contract(s) and all
                                 subsequent amendments to the
                                 contract(s) within 2 months of
                                 the date ONRR receives your
                                 first report that deducts the
                                 allowance on the form ONRR-2014.
----------------------------------------------------------------------------------------------------------------
1206.180(a)(1)(iii)...........  If ONRR determines that the                  AUDIT PROCESS. See note.
                                 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.
----------------------------------------------------------------------------------------------------------------

[[Page 64596]]

 
1206.180(a)(3)................  If your arm's-length processing               40               1              40
                                 contract includes more than one
                                 gas plant product and the
                                 processing costs attributable
                                 to each product cannot be
                                 determined from the contract,
                                 you must propose an allocation
                                 procedure to ONRR. * * * You
                                 are required to submit all
                                 relevant data to support your
                                 proposal * * *.
----------------------------------------------------------------------------------------------------------------
1206.180(b)(1)(ii)............  (b) Determining a processing                  20              12             240
                                 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)............  You may use either depreciation               20               1              20
                                 with a return on undepreciable
                                 capital investment or a return
                                 on depreciable capital
                                 investment. After you elect to
                                 use either method for a
                                 processing plant, you may not
                                 later elect to change to the
                                 other alternative without ONRR
                                 approval * * *.
----------------------------------------------------------------------------------------------------------------
1206.180(b)(2)(iv)(A).........  * * * Once you make an election,              20               1              20
                                 you may not change methods
                                 without ONRR approval * * *.
----------------------------------------------------------------------------------------------------------------
1206.180(b)(3)................  Your processing allowance under               20               1              20
                                 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 processing                AUDIT PROCESS. See note.
                                 allowance. (1) If ONRR
                                 requests, you must submit all
                                 data used to determine your
                                 processing allowance * * *.
----------------------------------------------------------------------------------------------------------------
1206.180(c)(2) and (d)........  (c)(2) You must report gas          Burden covered under Sec.   1210.52 in OMB
                                 processing allowances as a                  Control Number 1012-0004.
                                 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 Sec.   1218.54
                                 of this chapter from the first
                                 day of the first month you
                                 deducted a processing allowance
                                 until the date you pay the
                                 royalties due * * *.
----------------------------------------------------------------------------------------------------------------
1206.181(c)...................  How do I establish processing                 40               1              40
                                 costs for dual accounting
                                 purposes when I do not process
                                 the gas? * * * A proposed
                                 comparable processing fee
                                 submitted to either the Tribe
                                 and ONRR (for Tribal leases) or
                                 ONRR (for allotted leases) with
                                 your supporting documentation
                                 submitted to ONRR. If ONRR does
                                 not take action on your
                                 proposal within 120 days, the
                                 proposal will be deemed to be
                                 denied and subject to appeal to
                                 the ONRR Director under 30 CFR
                                 part 1290.
----------------------------------------------------------------------------------------------------------------
                PART 1207--SALES AGREEMENTS OR CONTRACTS GOVERNING THE DISPOSAL OF LEASE PRODUCTS
                                          Subpart A--General Provisions
----------------------------------------------------------------------------------------------------------------
1207.4(b).....................  Contracts made pursuant to old               AUDIT PROCESS. See note.
                                 form leases. * * * The
                                 stipulation, the substance of
                                 which must be included in the
                                 contract, or be made the
                                 subject matter of a separate
                                 instrument properly identifying
                                 the leases affected thereby, is
                                 as follows * * *.
----------------------------------------------------------------------------------------------------------------
1207.5........................  Contract and sales agreement                 AUDIT PROCESS. See note.
                                 retention. Copies of all sales
                                 contracts, posted price
                                 bulletins, etc., and copies of
                                 all agreements, other
                                 contracts, or other documents
                                 which are relevant to the
                                 valuation of production are to
                                 be maintained by the lessee and
                                 made available upon request
                                 during normal working hours to
                                 authorized ONRR, State or
                                 Indian representatives, other
                                 ONRR or BLM officials, auditors
                                 of the General Accounting
                                 Office, or other persons
                                 authorized to receive such
                                 documents, or shall be
                                 submitted to ONRR within a
                                 reasonable period of time, as
                                 determined by ONRR. Any oral
                                 sales arrangement negotiated by
                                 the lessee must be placed in
                                 written form and retained by
                                 the lessee. Records shall be
                                 retained in accordance with 30
                                 CFR part 1212.
----------------------------------------------------------------------------------------------------------------

[[Page 64597]]

 
    Total Burden..............  ................................  ..............             146           1,299
----------------------------------------------------------------------------------------------------------------
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.

    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.

    Authority:  Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 
seq.).

Gregory J. Gould,
Director for Office of Natural Resources Revenue.
[FR Doc. 2018-27259 Filed 12-14-18; 8:45 am]
BILLING CODE 4335-30-P