E8-25582. Agency Information Collection Activities: Proposed Collection, Comment Request

AGENCY:

Minerals Management Service (MMS), Interior.

ACTION:

Notice of an extension of a currently approved information collection (OMB Control Number 1010-0087).

SUMMARY:

To comply with the Paperwork Reduction Act of 1995 (PRA), we are inviting comments on a collection of information that we will submit to the Office of Management and Budget (OMB) for review and approval. We changed the title to meet OMB requirements. The previous title of this information collection request (ICR) was “30 CFR part 227—Delegation to States; 30 CFR part 228—Cooperative Activities with States and Indian Tribes; and 30 CFR part 229—Delegation to States.” The new title is “30 CFR parts 227, 228, and 229, Delegated and Cooperative Activities with States and Indian Tribes.”

DATES:

Submit written comments on or before December 26, 2008.

ADDRESSES:

You may submit comments by the following methods:

• Electronically go to http://www.regulations.gov. In the “Comment or Submission” column, enter “MMS-2008-MRM-0033” to view supporting and related materials for this ICR. Click on “Send a comment or submission” link to submit public comments. Information on using Regulations.gov, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site's “User Tips” link. All comments submitted will be posted to the docket.
• Mail comments to Armand Southall, Regulatory Specialist, Minerals Management Service, Minerals Revenue Management, P.O. Box 25165, MS 302B2, Denver, Colorado 80225. Please reference ICR 1010-0087 in your comments.
• Hand-carry comments or use an overnight courier service. Our courier address is Building 85, Room A-614, Denver Federal Center, West 6th Ave. and Kipling St., Denver, Colorado 80225. Please reference ICR 1010-0087 in your comments.

FOR FURTHER INFORMATION CONTACT:

Armand Southall, telephone [phone], or e-mail [e-mail]. You may also contact Mr. Southall to obtain copies, at no cost, of (1) the ICR, (2) any associated forms, and (3) the regulations that require the subject collection of information.

SUPPLEMENTARY INFORMATION:

Title: 30 CFR Parts 227, 228, and 229, Delegated and Cooperative Activities with States and Indian Tribes.

OMB Control Number: 1010-0087.

Bureau Form Number: None.

Abstract: The Secretary of the U.S. Department of the Interior is responsible for mineral resource development on Federal and Indian lands and the Outer Continental Shelf (OCS). Under the Mineral Leasing Act of 1920 (30 U.S.C. 1923), the Indian Mineral Development Act of 1982 (25 U.S.C. 2103), and the Outer Continental Shelf Lands Act (OCS Lands Act, 43 U.S.C. 1353), the Secretary is responsible for managing the production of minerals from Federal and Indian lands and the OCS, collecting royalties and other mineral revenues from lessees who produce minerals, and distributing the funds collected in accordance with applicable laws.

The Secretary also has a trust responsibility to manage Indian lands and seek advice and information from Indian beneficiaries. The MMS performs the mineral revenue management functions and assists the Secretary in carrying out the Department's trust responsibility for Indian lands.

When a company or an individual enters into a lease to explore, develop, produce, and dispose of minerals from Federal or Indian lands, that company or individual agrees to pay the lessor a share in an amount or value of production from the leased lands. The lessee is required to report various kinds of information to the lessor relative to the disposition of the leased minerals. Such information is generally available within the records of the lessee or others involved in developing, transporting, processing, purchasing, or selling of such minerals. The information collected includes data necessary to ensure that the royalties are accurately valued and appropriately paid.

Sections 202 and 205 of the Federal Oil and Gas Royalty Management Act of 1982 (FOGRMA), as amended, authorize the Secretary to develop delegated and cooperative agreements with states and Indian tribes to carry out certain inspection, auditing, investigation, or limited enforcement activities for leases in their jurisdiction. The states and Indian tribes are working partners and are an integral part of the overall onshore and offshore compliance effort.

Public laws pertaining to mineral revenues are located on our Web site at http://www.mrm.mms.gov/​Laws_​R_​D/​PublicLawsAMR.htm.

Relevant parts of the Code of Federal Regulations (CFR) include 30 CFR parts 227, 228, and 229, as described below:

Title 30 CFR Part 227—Delegation to States, provides procedures to delegate certain Federal minerals revenue management functions to states for Federal oil and gas leases. The regulation also provides only audit and investigation functions to states for geothermal and solid mineral leases, and leases subject to Section 8(g) of the OCS Lands Act, within their state boundaries.

Title 30 CFR Part 228—Cooperative Activities with States and Indian Tribes, provides procedures to utilize the capabilities of the Indian tribes to carry out audits and related investigations of their respective leased lands.

Title 30 CFR Part 229—Delegation to States, provides procedures to utilize the capabilities of the states to carry out audits and related investigations of leased Indian lands within their respective state boundaries, by permission of the respective Indian tribal councils or individual Indian mineral owners.

Effective September 11, 1997, parts 228 and 229 do not apply to Federal lands, due to implementation of RSFA amendments. The final rulemaking of Delegation of Royalty Management Functions to States was published on August 12, 1997 (62 FR 43076), effective September 11, 1997, and stated that parts 228 and 229 do not apply to Federal lands because delegation for Federal lands is now covered under part 227.

Delegation to States and Cooperative Activities With Indian Tribes

States

Under Section 205 of FOGRMA, as amended by RSFA Section 3, the Secretary is authorized to delegate to states, all or part of authorities and responsibilities of the Secretary, to conduct inspections, audits, investigations, and limited enforcement activities for leases in their jurisdiction.

Eleven states currently have MMS-approved delegation agreements to perform audits and investigations. The states perform nearly all audits on Federal leases within their boundaries and receive 50 percent of the revenues from those leases, although Alaska receives 90 percent of the revenues from Federal leases in that state.

To be considered for delegation under 30 CFR part 227, states must submit a written delegation proposal to, and receive approval from, the MMS Associate Director for Minerals Revenue Management (MRM). Delegation agreements benefit both MMS and states by ensuring that Federal royalty payments are in compliance with applicable laws, lease terms, and regulations.

The MRM is held accountable to certain measurements and standards and must file reports to outside entities. States choosing to participate in any delegable function are held to these same measurements and standards and, therefore, must provide data to document the work they are performing. This information, provided to MMS in the course of performing delegated agreements, is the focus of this information collection. States must comply with Generally Accepted Accounting Principles (GAAP) and MMS standards, as required under 30 CFR 227.200, and also with the MMS Audit Procedures Manual, as required under 30 CFR 227.301.

Indian Tribes

Under FOGRMA Section 202, Cooperative Agreements, as amended by RSFA Section 9, the Secretary is authorized to enter into cooperative agreements with any state or Indian tribe upon their written request; to share oil or gas revenue management information; and to use the capabilities of states and Indian tribes to carry out inspection, auditing, investigation, or limited enforcement activities for tribal leases.

A state must receive written permission from the respective Indian tribes(s) or individual Indian mineral owner(s) to carry out the above functions.

Under 30 CFR part 228, no state has proposed to enter into a cooperative agreement to undertake activities on Indian lands within its boundaries.

To be considered for a cooperative agreement, Indian tribes must comply with the regulations at 30 CFR part 228. Indian tribes who want to perform royalty audits, in cooperation with MMS, must submit a written proposal to enter into a cooperative agreement, signed by the tribal chairman or other appropriate official, to the MMS Director. The request should outline the activities to be undertaken and present evidence that the Indian tribe(s) can meet the standards established by the Secretary for the activities to be conducted. Prior to beginning work, approval must be obtained from the MMS Director. Currently, seven Indian tribes have cooperative agreements to perform audits and investigations.

When an Indian tribe performs any of the cooperative activities under 30 CFR part 228, the Indian tribe also assumes the burden of providing various types of information to MMS. After the request is accepted and a cooperative agreement is in effect, Indian tribes must submit an annual work plan and budget, as well as quarterly reimbursement vouchers. They must follow GAAP and MMS standards. The cooperative agreements also require them to comply with the MMS Audit Procedures Manual, and Generally Accepted Government Auditing Standards (GAGAS).

Cooperative activities benefit both MMS and Indian tribes by ensuring that royalty payments from Indian leases are in compliance with applicable laws, lease terms, and regulations. Indian tribes currently manage audits for 91 percent of all tribal mineral royalties.

Under the Secretary's delegation of authority at 30 CFR part 229, a state may conduct audits and related investigations of oil and gas payments made to MMS regarding leased Indian lands within the state's boundaries. After the state receives approval of the Secretary's delegation of authority, it must submit annual audit work plans detailing its audits and related investigations, annual budgets, and quarterly reimbursement vouchers. The state must maintain books and records and provide a quarterly summary of costs following Department standards, as required under 30 CFR 229.109. In addition, under 30 CFR part 229, no state has proposed to undertake delegated functions on Indian lands within its boundaries.

Summary

This collection of information is necessary in order for states and Indian tribes to conduct audits and related investigations of oil, gas, coal, any other solid minerals, and geothermal royalty revenues from Federal and tribal leased lands.

The MMS protects proprietary information submitted under this collection. The MMS does not collect items of a sensitive nature. A response to engage in these programs is voluntary and required to obtain the benefit of entering into a cooperative agreement with the Secretary.

Frequency of Response: Varies based on the function performed.

Estimated Number and Description of Respondents: 11 states and 7 Indian tribes.

Estimated Annual Reporting and Recordkeeping “Hour” Burden: 6,178 hours.

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

30 CFR section	Reporting and recordkeeping requirements	Hour burden per response	Number of annual responses	Annual burden hours
Part 227—Delegation to States
Delegation Proposals
227.103; 107; 109; 110(a-b)(1); 110(c-d); 111(a-b); 805	What must a State's delegation proposal contain? If you want MMS to delegate royalty management functions to you, then you must submit a delegation proposal to the MMS Associate Director for Minerals Revenue Management. MMS will provide you with technical assistance and information to help you prepare your delegation proposal	200	1	200
Delegation Process
227.110(b)(2)	(b)(2) If you want to change the terms of your delegation agreement for the renewal period, you must submit a new delegation proposal under this part	15	11	165
Existing Delegations
Compensation
227.112(d-e)	What compensation will a State receive to perform delegated functions?	4	84	336
	You will receive compensation for your costs to perform each delegated function subject to the following conditions
	(d) At a minimum, you must provide vouchers detailing your expenditures quarterly during the fiscal year. However, you may agree to provide vouchers on a monthly basis in your delegation agreement.a
States' Responsibilities To Perform Delegated Functions
227.200(a), (b), (c), and (d); 112(e)	What are a State's general responsibilities if it accepts a delegation?	200	11	2,200
	For each delegated function you perform, you must: (a) * * * seek information or guidance from MMS regarding new, complex, or unique issues
	(b)(1) * * * Provide complete disclosure of financial results of activities;
	(2) Maintain correct and accurate records of all mineral-related transactions and accounts;
	(3) Maintain effective controls and accountability;
	(4) Maintain a system of accounts
	(5) Maintain adequate royalty and production information
	(c) Assist MMS in meeting the requirements of the Government Performance and Results Act (GPRA)
	(d) Maintain all records you obtain or create under your delegated function, such as royalty reports, production reports, and other related information. * * * You must maintain such records for at least 7 years
227.200(e); 801(a); 804	(e) Provide reports to MMS about your activities under your delegated functions * * * At a minimum, you must provide periodic statistical reports to MMS summarizing the activities you carried out.b	3	44	132
227.200(f); 401(e); 601(d)	(f) Assist MMS in maintaining adequate reference, royalty, and production databases	1	250	250
227.200(g); 301(e)	(g) Develop annual work plans	60	11	660
227.200(h)	(h) Help MMS respond to requests for information from other Federal agencies, Congress, and the public	8	10	80
227.400(a)(4) and (a)(6); 401(d); 501(c)	What functions may a State perform in processing production reports or royalty reports?	1	250	250
	Production reporters or royalty reporters provide production, sales, and royalty information on mineral production from leases that must be collected, analyzed, and corrected
	(a) If you request delegation of either production report or royalty report processing functions, you must perform
	(4) Timely transmitting production report or royalty report data to MMS and other affected Federal agencies
	(6) Providing production data or royalty data to MMS and other affected Federal agencies
227.400(c)	(c) You must provide MMS with a copy of any exceptions from reporting and payment requirements for marginal properties and any alternative royalty and payment requirements for unit agreements and communitization agreements you approve	1	12	12
227.601(c)	What are a State's responsibilities if it performs automated verification?	8	11	88
	To perform automated verification of production reports or royalty reports, you must
	(c) Maintain all documentation and logging procedures
Performance Review
Subtotal Burden for 30 CFR Part 227			695	4,373
Part 228—Cooperative Activities With States and Indian Tribes
Subpart C—Oil and Gas, Onshore
228.100(a) and (b); 101(c); 107(b)	Entering into an agreement	200	1	200
	(a) * * * Indian tribe may request the Department to enter into a cooperative agreement by sending a letter from * * * tribal chairman * * * to the Director of MMS
	(b) The request for an agreement shall be in a format prescribed by MMS and should include at a minimum the following information:
	(1) Type of eligible activities to be undertaken
	(2) Proposed term of the agreement
	(3) Evidence that * * * Indian tribe meets, or can meet by the time the agreement is in effect
	(4) If the State is proposing to undertake activities on Indian lands located within the State, a resolution from the appropriate tribal council indicating their agreement to delegate to the State responsibilities under the terms of the cooperative agreement for activities to be conducted on tribal or allotted land
228.101(a)	Terms of agreement (a) Agreements entered into under this part shall be valid for a period of 3 years and shall be renewable * * * upon request of * * * Indian tribe	15	7	105
228.101(d)	(d) * * * Indian tribe will be given 60 days to respond to the notice of deficiencies and to provide a plan for correction of those deficiencies	80	1	80
228.103(a) and (b)	Maintenance of records	120	7	840
	(a) * * * Indian tribe entering into a cooperative agreement under this part must retain all records, reports, working papers, and any backup materials
	(b) * * * Indian tribe shall maintain all books and records
228.105(a)(1) and (a)(2)	Funding of cooperative agreements	60	7	420
	(a)(1) The Department may, under the terms of the cooperative agreement, reimburse * * * Indian tribe up to 100 percent of the costs of eligible activities. Eligible activities will be agreed upon annually upon the submission and approval of a work plan and funding requirement
	(2) A cooperative agreement may be entered into with * * * Indian tribe, upon request, without a requirement for reimbursement of costs by the Department
228.105(c)	(c) * * * Indian tribe shall submit a voucher for reimbursement of eligible costs incurred within 30 days of the end of each calendar quarter. * * * Indian tribe must provide the Department a summary of costs incurred, for which * * * Indian tribe is seeking reimbursement, with the voucher.c	4	36	144
Subtotal Burden for 30 CFR Part 228			59	1789
Part 229—Delegation to States
Subpart C—Oil and Gas, Onshore
Administration of Delegations
229.100(a)(1) and (a)(2)	Authorities and responsibilities subject to delegation	1	1	1
	(a) All or part of the following authorities and responsibilities of the Secretary under the Act may be delegated to a State authority:
	(1) Conduct of audits related to oil and gas royalty payments made to the MMS which are attributable to leased * * * Indian lands within the State. Delegations with respect to any Indian lands require the written permission, subject to the review of the MMS, of the affected Indian tribe or allottee
	(2) Conduct of investigation related to oil and gas royalty payments made to the MMS which are attributable to * * * Indian lands within the State. Delegation with respect to any Indian lands require the written permission, subject to the review of the MMS, of the affected Indian tribe or allottee. No investigation will be initiated without the specific approval of the MMS
229.101(a) and (d)	Petition for delegation	1	1	1
	(a) The governor or other authorized official of any State which contains * * * Indian oil and gas leases where the Indian tribe and allottees have given the State an affirmative indication of their desire for the State to undertake certain royalty management-related activities on their lands, may petition the Secretary to assume responsibilities to conduct audits and related investigations of royalty related matters affecting . . . Indian oil and gas leases within the State
	(d) In the event that the Secretary denies the petition, the Secretary must provide the State with the specific reasons for denial of the petition. The State will then have 60 days to either contest or correct specific deficiencies and to reapply for a delegation of authority
229.102(c)	Fact-finding and hearings (c) A State petitioning for a delegation of authority shall be given the opportunity to present testimony at a public hearing	1	1	1
229.103(c)	Duration of delegations; termination of delegations (c) A State may terminate a delegation of authority by giving a 120-day written notice of intent to terminate	1	1	1
229.105	Evidence of Indian agreement to delegation In the case of a State seeking a delegation of authority for Indian lands * * * the State petition to the Secretary must be supported by an appropriate resolution or resolutions of tribal councils joining the State in petitioning for delegation and evidence of the agreement of individual Indian allottees whose lands would be involved in a delegation. Such evidence shall specifically speak to having the State assume delegated responsibility for specific functions related to royalty management activities	1	1	1
229.106	Withdrawal of Indian lands from delegated authority If at any time an Indian tribe or an individual Indian allottee determines that it wishes to withdraw from the State delegation of authority in relation to its lands, it may do so by sending a petition of withdrawal to the State	1	1	1
229.109(a)	Reimbursement for costs incurred by a State under the delegation of authority (a) The Department of the Interior (DOI) shall reimburse the State for 100 percent of the direct cost associated with the activities undertaken under the delegation of authority. The State shall maintain books and records in accordance with the standards established by the DOI and will provide the DOI, on a quarterly basis, a summary of costs incurred	1	1	1
229.109(b)	(b) The State shall submit a voucher for reimbursement of costs incurred within 30 days of the end of each calendar quarter	1	1	1
Delegation Requirements
229.120	Obtaining regulatory and policy guidance All activities performed by a State under a delegation must be in full accord with all Federal laws, rules and regulations, and Secretarial and agency determinations and orders relating to the calculation, reporting, and payment of oil and gas royalties. In those cases when guidance or interpretations are necessary, the State will direct written requests for such guidance or interpretation to the appropriate MMS officials	1	1	1
229.121(a), (b), (c), and (d)	Recordkeeping requirements	1	1	1
	(a) The State shall maintain in a safe and secure manner all records, workpapers, reports, and correspondence gained or developed as a consequence of audit or investigative activities conducted under the delegation
	(b) The State must maintain in a confidential manner all data obtained from DOI sources or from payor or company sources under the delegation
	(c) All records subject to the requirements of paragraph (a) must be maintained for a 6-year period measured from the end of the calendar year in which the records were created * * * Upon termination of a delegation, the State shall, within 90 days from the date of termination, assemble all records specified in subsection (a), complete all working paper files in accordance with § 229.124, and transfer such records to the MMS
	(d) The State shall maintain complete cost records for the delegation in accordance with generally accepted accounting principles
229.122(a), (b), and (c)	Coordination of audit activities	1	1	1
	(a) Each State with a delegation of authority shall submit annually to the MMS an audit workplan specifically identifying leases, resources, companies, and payors scheduled for audit * * * A State may request changes to its workplan * * * at the end of each quarter of each fiscal year. All requested changes are subject to approval by the MMS and must be submitted in writing
	(b) When a State plans to audit leases of a lessee or royalty payor for which there is an MMS or OIG resident audit team, all audit activities must be coordinated through the MMS or OIG resident supervisor
	(c) The State shall consult with the MMS and/or OIG regarding resolution of any coordination problems encountered during the conduct of delegation activities
229.123 (b)(3)(i)	Standards for audit activities (b)(3) Standards of reporting. (i) Written audit reports are to be submitted to the appropriate MMS officials at the end of each field examination	1	1	1
229.124	Documentation standards Every audit performed by a State under a delegation of authority must meet certain documentation standards. In particular, detailed workpapers must be developed and maintained	1	1	1
229.125(a) and (b)	Preparation and issuance of enforcement documents	1	1	1
	(a) Determinations of additional royalties due resulting from audit activities conducted under a delegation of authority must be formally communicated by the State, to the companies or other payors by an issue letter prior to any enforcement action
	(b) After evaluating the company or payor's response to the issue letter, the State shall draft a demand letter which will be submitted with supporting workpaper files to the MMS for appropriate enforcement action. Any substantive revisions to the demand letter will be discussed with the State prior to issuance of the letter
229.126(a) and (b)	Appeals	1	1	1
	(a) * * * The State regulatory authority shall, upon the request of the MMS, provide competent and knowledgeable staff for testimony, as well as any required documentation and analyses, in support of the lessor's position during the appeal process
	(b) An affected State, upon the request of the MMS, shall provide expert witnesses from their audit staff for testimony as well as required documentation and analyses to support the Department's position during the litigation of court cases arising from denied appeals
229.127	Reports from States The State, acting under the authority of the Secretarial delegation, shall submit quarterly reports which will summarize activities carried out by the State during the preceding quarter of the year under the provisions of the delegation	1	1	1
Subtotal Burden for 30 CFR Part 229			16	16
Total Burden			770	6,178
a Note: 5 states × 12 monthly vouchers = 60 and 6 states × 4 quarterly vouchers = 24.
b Note: 4 quarterly reports × 11 states = 44.
c Note: 1 tribe × 12 monthly vouchers = 12 and 6 tribes × 4 quarterly vouchers = 24.

Estimated Annual Reporting and Recordkeeping “Non-hour Cost” Burden: We have identified no “non-hour cost” burden associated with the collection of information.

Public Disclosure Statement: The PRA (44 U.S.C. 3501 et seq.) provides that an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

Comments: Before submitting an ICR to OMB, PRA Section 3506(c)(2)(A) requires each agency to “* * * provide 60-day notice in the Federal Register * * * and otherwise consult with members of the public and affected agencies concerning each proposed collection of information * * *.” Agencies must specifically solicit comments to: (a) Evaluate whether the proposed collection of information is necessary for the agency to perform its duties, including whether the information is useful; (b) evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information; (c) enhance the quality, usefulness, and clarity of the information to be collected; and (d) minimize the burden on the respondents, including the use of automated collection techniques or other forms of information technology.

The PRA also requires agencies to estimate the total annual reporting “non-hour cost” burden to respondents or recordkeepers resulting from the collection of information. If you have costs to generate, maintain, and disclose this information, you should comment and provide your total capital and startup cost components or annual operation, maintenance, and purchase of service components. You should describe the methods you use to estimate major cost factors, including system and technology acquisition, expected useful life of capital equipment, discount rate(s), and the period over which you incur costs. Capital and startup costs include, among other items, computers and software you purchase to prepare for collecting information; monitoring, sampling, and testing equipment; and record storage facilities. Generally, your estimates should not include equipment or services purchased: (i) Before October 1, 1995; (ii) to comply with requirements not associated with the information collection; (iii) for reasons other than to provide information or keep records for the Government; or (iv) as part of customary and usual business or private practices.

We will summarize written responses to this notice and address them in our ICR submission for OMB approval, including appropriate adjustments to the estimated burden. We will provide a copy of the ICR to you without charge upon request. The ICR also will be posted at http://www.mrm.mms.gov/​Laws_​R_​D/​FRNotices/​FRInfColl.htm.

Public Comment Policy: We will post all comments in response to this notice on our Web site at http://www.mrm.mms.gov/​Laws_​R_​D/​FRNotices/​FRInfColl.htm. We will also make copies of the comments available for public review, including names and addresses of respondents, during regular business hours at our offices in Lakewood, Colorado. Before including your address, phone number, e-mail address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public view, we cannot guarantee that we will be able to do so.

MMS Information Collection Clearance Officer: Arlene Bajusz [phone].

Dated: October 9, 2008.

Gregory J. Gould,

Associate Director for Minerals Revenue Management.