E6-18665. 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 1010-0090).

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. The information collection request (ICR) concerns the paperwork requirements in the regulations under 30 CFR part 216, subpart B. The title of this ICR is 30 CFR 216.57 Stripper Royalty Rate Reduction Notification. The form associated with this ICR is Form MMS-4377, Stripper Royalty Rate Reduction Notification.

DATES:

Submit written comments on or before January 5, 2007.

ADDRESSES:

Submit written comments to Sharron L. Gebhardt, Lead Regulatory Specialist, Minerals Management Service, Minerals Revenue Management, P.O. Box 25165, MS 302B2, Denver, Colorado 80225. If you use an overnight courier service or wish to hand-carry your comments, our courier address is Building 85, Room A-614, Denver Federal Center, West 6th Ave. and Kipling Blvd., Denver, Colorado 80225. You may also e-mail your comments to us at [e-mail]. Include the title of the information collection and the OMB control number in the “Attention” line of your comment. Also include your name and return address. If you do not receive a confirmation that we have received your e-mail, contact Ms. Gebhardt at [phone].

FOR FURTHER INFORMATION CONTACT:

Sharron L. Gebhardt, telephone [phone], FAX [phone], or e-mail [e-mail].

SUPPLEMENTARY INFORMATION:

Title: 30 CFR 216.57 Stripper Royalty Rate Reduction Notification.

OMB Control Number: 1010-0090.

Bureau Form Number: Form MMS-4377, Stripper Royalty Rate Reduction Notification.

Abstract: The Secretary of the U.S. Department of the Interior is responsible for collecting royalties from lessees who produce minerals from leased Federal and Indian lands. The Secretary is required by various laws to manage mineral resources production on Federal and Indian lands, collect the royalties due, and distribute the funds in accordance with those laws.

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

The Federal Oil and Gas Royalty Management Act (FOGRMA) of 1982, 30 U.S.C. 1701 et seq., states in Section 101(a) that the Secretary “* * * shall establish a comprehensive inspection, collection, and fiscal and production accounting and auditing system to provide the capability to accurately determine oil and gas royalties, interest, fines, penalties, fees, deposits, and other payments owed, and collect and account for such amounts in a timely manner.” The persons or entities described at 30 U.S.C. 1713 are required to make reports and provide reasonable information as defined by the Secretary. Applicable public laws pertaining to mineral leases on Federal and Indian lands are located on our Web site at http://www.mrm.mms.gov/​Laws_​R_​D/​PublicLawsAMR.htm.

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 (royalty) of the value received from production from the leased lands. The lease creates a business relationship between the lessor and the lessee. The lessee is required to report various kinds of information to the lessor relative to the disposition of the leased minerals. Such information is similar to data reported to private and public mineral interest owners and 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 paid appropriately.

The Bureau of Land Management, the surface management agency for Federal onshore leases, granted royalty rate reductions to operators of stripper oil properties producing an average of less than 15 barrels of oil per eligible well per well-day for applicable sales periods from October 1, 1992 through January 31, 2006. See 43 CFR 3103.4-2. The purpose of these royalty rate reductions was to encourage continued production, provide an incentive for enhanced oil recovery projects, discourage abandonment of properties producing an average of less than 15 barrels of oil per eligible well per well-day, and reduce the operator's expenses. The royalty rate for a stripper oil property was lower than the royalty rate reflected in the lease and thus reduced the amount of revenues paid to the Federal Government.

Reporters used the Form MMS-4377 to notify MMS of royalty rate changes for production through January 31, 2006. Operators submitted an initial Form MMS-4377 when a new property qualified as a stripper oil property. Reporters submitted Form MMS-4377 to notify MMS of a royalty rate reduction that was lower than the initial royalty rate reduction on an existing stripper oil property (out-year notification). The decision to request an initial royalty rate reduction was voluntary; however, failure to timely submit the out-year notification resulted in the royalty rate change being denied. Although the benefits under 43 CFR 3103.4-2 terminated effective February 1, 2006, MMS continues to verify submitted notifications and sometimes requires the operator to submit an amended notification.

Proprietary information submitted to MMS under this collection is protected, and no items of a sensitive nature are collected. The requirement to respond is required to obtain the benefit of a royalty rate reduction.

Frequency: As requested by MMS.

Estimated Number and Description of Respondents: 150 operators of stripper oil properties producing an average of less than 15 barrels of oil per eligible well per well-day.

Estimated Annual Reporting and Recordkeeping “Hour” Burden: 180 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 216 Subpart B	Reporting and recordkeeping requirement	Hour burden	Average number of annual responses	Annual burden hours
216.57	Stripper royalty rate reduction notification In accordance with its regulations at 43 CFR 3103.4-1, titled “Waiver, suspension, or reduction of rental, royalty, or minimum royalty,” the Bureau of Land Management (BLM) may grant reduced royalty rates to operators of low producing oil leases to encourage continued production. Operators who have been granted a reduced royalty rate(s) by BLM must submit a Stripper Royalty Rate Reduction Notification (Form MMS-4377) to MMS for each 12-month qualifying period that a reduced royalty rate(s) is granted [58 FR 64903, Dec. 10, 1993] Please note the BLM citation and title changed to 43 CFR 3103.4-2 Stripper well royalty reductions	1.2	150	180
Total Burden			150	180

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 notice * * * 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 on our Web site 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 also will 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. Upon request, we will withhold an individual respondent's home address from the public record, as allowable by law. There also may be circumstances in which we would withhold a respondent's identity, as allowable by law. If you request that we withhold your name and/or address, state your request prominently at the beginning of your comment. However, we will not consider anonymous comments. We will make all submissions from organizations or businesses, and from individuals identifying themselves as representatives or officials of organizations or businesses, available for public inspection in their entirety.

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

Dated: October 24, 2006.

Lucy Querques Denett,

Associate Director for Minerals Revenue Management.