03-9695. Agency Information Collection Activities: Proposed Collection; Comment Request

AGENCY:

Minerals Management Service (MMS), Interior.

ACTION:

Notice of extension of an information collection (1010-0071).

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 203, “Relief or Reduction in Royalty Rates.”

DATES:

Submit written comments by June 20, 2003.

ADDRESSES:

Mail or hand carry comments to the Department of the Interior; Minerals Management Service; Attention: Rules Processing Team; Mail Stop 4024; 381 Elden Street; Herndon, Virginia 20170-4817. If you wish to e-mail comments, the address is: [e-mail]. Reference “Information Collection 1010-0071” in your e-mail subject line and mark your message for return receipt. Include your name and return address in your message.

FOR FURTHER INFORMATION CONTACT:

Arlene Bajusz, Rules Processing Team, [phone]. You may also contact Arlene Bajusz to obtain a copy, at no cost, of the regulations that require the subject collection of information.

SUPPLEMENTARY INFORMATION:

Title: 30 CFR 203, Relief or Reduction in Royalty Rates.

OMB Control Number: 1010-0071.

Abstract: The Outer Continental Shelf (OCS) Lands Act, as amended by Public Law 104-58, Deep Water Royalty Relief Act (DWRRA), gives the Secretary of the Interior (Secretary) the authority to reduce or eliminate royalty or any net profit share specified in OCS oil and gas leases to promote increased production. The DWRRA also authorized the Secretary to suspend royalties when necessary to promote development or recovery of marginal resources on producing or non-producing leases in the Gulf of Mexico (GOM) west of 87 degrees, 30 minutes West longitude.

Section 302 of the DWRRA provides that new production from a lease in existence on November 28, 1995, in a water depth of at least 200 meters, and in the GOM west of 87 degrees, 30 minutes West longitude qualifies for royalty suspension in certain situations. To grant a royalty suspension, the Secretary must determine that the new production or development would not be economic without royalty relief. The Secretary must then determine the volume of production on which no royalty would be due in order to make the new production from the lease economically viable. This determination must be done on a case-by-case basis. By regulation published January 15, 2002, (67 FR 1862) production from leases in the same water depth and area issued after November 28, 2000, also can qualify for royalty suspension in addition to any that may be included in their lease terms.

In addition, Federal policy and statute require us to recover the cost of services that confer special benefits to identifiable non-Federal recipients. The Independent Offices Appropriation Act (31 U.S.C. 9701), OMB Circular A-25, and the Omnibus Appropriations Bill (Pub. L. 104-133, 110 Stat. 1321, April 26, 1996) authorize MMS to collect these fees to reimburse us for the cost to process applications or assessments.

Regulations at 30 CFR part 203 implement these statutes and policy and require respondents to pay a fee to request royalty relief. Section 30 CFR 203.3 states that, “We will specify the necessary fees for each of the types of royalty-relief applications and possible MMS audits in a Notice to Lessees. We will periodically update the fees to reflect changes in costs as well as provide other information necessary to administer royalty relief.”

The MMS use the information to make decisions on the economic viability of leases requesting a suspension or elimination of royalty or net profit share. These decisions have enormous monetary impacts to both the lessee and the Federal government. Royalty relief can lead to increased production of natural gas and oil, creating profits for lessees and royalty and tax revenues for the government that they might not otherwise receive. We could not make an informed decision without the collection of information required by 30 CFR part 203.

We will protect information from respondents considered proprietary under the Freedom of Information Act (5 U.S.C. 552) and its implementing regulations (43 CFR 2) and 30 CFR 203.63(b) and 30 CFR 250.196. No items of a sensitive nature are collected. Responses are mandatory or required to obtain or retain a benefit.

Frequency: On occasion.

Estimated Number and Description of Respondents: Approximately 130 Federal OCS oil and gas lessees.

Estimated Reporting and Recordkeeping “Hour” Burden: The currently approved annual reporting burden for this collection is 8,650 hours. The following chart details the individual components and respective hour burden estimates of this ICR. In calculating the burdens, we assumed that respondents perform certain requirements in the normal course of their activities. We consider these to be usual and customary and took that into account in estimating the burden.

Reporting or recordkeeping requirement 30 CFR part 203	Application/Audit Fees
	Average No. annual responses	Hour burden	Annual burden hours
OCS Lands Act Reporting
Application—leases that generate earnings that cannot sustain continued production (end-of-life lease)	2 Applications	100	200
	Application 2 × $12,000 = $24,000 *
	Audit 1 × $10,000 = $10,000
Application—apart from formal programs for royalty relief for marginal producing lease (expect < 1 per year)	1 Application	250	250
	Application 1 × $15,000 = $15,000 *
	Audit 1 × $10,000 = $10,000
§ 203.55 Renounce relief arrangement (seldom, if ever will be used; minimal burden to prepare letter)	1 Letter	1	1
§ 203.81, 203.83 through 203.89 Required reports	Burden included with applications		0
OCS Lands Act Reporting Subtotal	4 responses	N/A	451
	Processing Fees = $59,000
DWRAA Reporting
Application—leases in designated areas of GOM deep water acquired in lease sale before 11/28/95 or after 11/28/00 and are producing (deep water expansion project)	1 Application	2,000	2,000
	Application 1 × $39,000 = $39,000
	No Audit
Application—leases in designated areas of deep water GOM, acquired in lease sale before 11/28/95 or after 11/28/00, that have not produced (pre-Act or post-2000 deep water leases)	1 Application	2,000	2,000
	Application 1 × $49,000 = $49,000 *
	Audit 1 × $25,000 = $25,000
Application—short form to add or assign pre-Act lease	1 Application	40	40
	Application 1 × $1,000 = $1,000
	No Audit
Application—preview assessment (seldom if ever will be used as applicants generally opt for binding determination by MMS instead)	1 Application	900	900
	Application 1 × $46,600 = $46,600
	No Audit
Application—apart from formal programs for royalty relief for marginal expansion project or marginal non-producing lease (expect < 1 per year)	1 Application	1,000	1,000
	Application 1 × $49,000 = $49,000
	Audit 1 × $20,000 = $20,000
Redetermination	1 Redetermination	500	500
	Application 1 × $32,000 = $32,000 *
	Audit 1 × $25,000 = $25,000
§ 203.70, 203.81, 203.90, 203.91 Submit fabricator's confirmation report	2 Reports	20	40
§ 203.70, 203.81, 203.90, 203.92 Submit post-production development report	2 Reports *	50	100
§ 203.77 Renounce relief arrangement (seldom, if ever will be used; minimal burden to prepare letter)	1 Letter	1	1
§ 203.79(a) Request reconsideration of MMS field designation	4 Requests	400	1,600
§ 203.79(c) Request extension of deadline to start construction	1 Request	2	2
§ 203.81, 203.83 through 203.89 Required reports	Burden included with applications		0
DWRRA Reporting Subtotal	16 Reponses	N/A	8,183
	Processing Fees = $286,600
Recordkeeping Burden
§ 203.91 Retain cost records for post-production development/fabrication reports (records retained as usual/customary business practice; minimal burden to make available at MMS request)	2 Recordkeepers	8	16
Total Annual Burden	22 Responses	N/A	8,650
* CPA certification expense burden also imposed on applicant.

Estimated Reporting and Recordkeeping “Non-Hour Cost” Burden: There are two non-hour costs associated with this information collection. The currently approved non-hour cost burden is $661,000. This estimate is based on:

(a) Application and audit fees. The total annual estimated cost burden for these fees is $345,600 (refer to burden chart).

(b) Cost of reports prepared by independent certified public accountants. Under § 203.81, a report prepared by an independent certified public accountant (CPA) must accompany the application and post-production report (expansion project, short form, and preview assessment applications are excluded). The OCS Lands Act applications will require this report only once; the DWRRA applications will require this report at two stages—with the application and post-production development report for successful applicants. We estimate approximately seven submissions each year at an average cost of $45,000 per report, for a total estimated annual cost burden of $315,000.

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

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.

Agencies must also estimate the “non-hour cost” burdens to respondents or recordkeepers resulting from the collection of information. Therefore, 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, and record storage facilities. You should not include estimates for 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 submission for OMB approval. As a result of your comments, we will make any necessary adjustments to the burden in our submission to OMB.

Public Comment Policy: Our practice is to make comments, including names and home addresses of respondents, available for public review during regular business hours. Individual respondents may request that we withhold their home address from the record, which we will honor to the extent allowable by law. There may be circumstances in which we would withhold from the record a respondent's identity, as allowable by the law. If you wish us to withhold your name and/or address, you must state this 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: Jo Ann Lauterbach, [phone].

Dated: April 9, 2003.

E.P. Danenberger,

Chief, Engineering and Operations Division.