00-11853. Agency Information Collection Activities: Proposed Collection; Comment Request

AGENCY:

Minerals Management Service (MMS), Interior.

ACTION:

Notice of a revision to a currently approved information collection (OMB Control Number 1010-0071).

SUMMARY:

As part of its continuing effort to reduce paperwork and respondent burden, MMS invites the public and other Federal agencies to comment on a proposal to revise the currently approved collection of information discussed below on relief or reduction in royalty rates. We intend to submit this collection of information to the Office of Management and Budget (OMB) for approval. The Paperwork Reduction Act of 1995 (PRA) 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.

DATES:

Submit written comments by July 10, 2000.

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. 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 rulemaking 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.

FOR FURTHER INFORMATION CONTACT:

Alexis London, Rules Processing Team, telephone [phone]. You may also contact Alexis London to obtain a copy of the collection of information at no cost.

SUPPLEMENTARY INFORMATION:

Title: 30 CFR Part 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 in the absence of 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.

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.” Our submission to OMB will request approval of revised application fees and establishment of a new category of applications (special relief for marginal operations) and associated fee. The fee revisions are based on our experience in administering the program over the past several years.

Responses are required to obtain or retain a benefit. Proprietary information respondents submit is protected according to the Freedom of Information Act (5 U.S.C. 552) and its implementing regulations (43 CFR 2) and 30 CFR 03.63(b) and 30 CFR 250.196. No items of a sensitive nature are collected.

Frequency: The frequency is on occasion.

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

Estimated Annual Reporting and Recordkeeping “Hour” Burden: The currently approved burden for this information collection is 14,704 hours. Due to a decrease in the estimated number of applications submitted each year, we will be decreasing the annual burden to 4,855 hours (refer to burden chart).

Estimated Annual 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 $1,833,250. Due to a decrease in the estimated number of applications submitted each year and the revised fee schedule, we will be decreasing the annual cost burden to $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 (except 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 7 submissions each year at an average cost of $45,000 per report, for a total estimated annual cost burden of $315,000.

Burden Breakdown Chart

Reporting or recordkeeping requirement 30 CFR Part 203	Application/Audit Fees
	Annual responses	Hours per response	Annual burden hours
OCS Lands Act Reporting
Application—leases that generate earnings that can't sustain continued production (end-of-life lease)	2 Applications	200 hours	400
	Application 2 × $12,000 = $24,000*
	Audit 1 × $10,000 = $10,000
Application—special relief for marginal producing lease (expect less than 1 per year-new category)	1 Application	250 hours	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 hour	1
§ 203.81 Required reports.	Burden included with applications
OCS Lands Act Reporting Subtotal	4 responses	N/A	651 hours
	Processing Fees = $59,000
DWRAA Reporting
Application—leases in designated areas of GOM deep water acquired in lease sale before 11/28/95 and are producing (deep water expansion project)	1 Application	600 hours	600
	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 11/28/2000, that have not produced (pre-act or post-2000 deep water leases)	1 Application	1,000 hours	1,000
	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 hours	40
	Application 1 × $1,000 = $1,000
	No Audit
Application—preview assessment (seldom if ever will be used as applicants opt for binding determination by MMS instead; minimal burden if used)	1 Application	900 hours	900
	Application 1 x $46,600 = $46,600
	No Audit
Application—special relief for marginal expansion project or marginal non—producing lease (expect less than 1 per year-new category)	1 Application	1,000 hours	1,000
	Application 1 × $49,000 = $49,000
	Audit 1 × $20,000 = $20,000
Redetermination	1Redetermination	500 hours	500
	Application 1 × $32,000 = $32,000*
	Audit 1 × $25,000 = $25,000
§ 203.70 Submit fabricator's confirmation report	2 Reports	20 hours	40
§ 203.70 Submit post-production development report	2 Reports*	50 hours	100
§ 203.77 Renounce relief arrangement (seldom, if ever, will be used; minimal burden to prepare letter)	1 Letter	1 hour	1
§ 203.79(a) Request reconsideration of MMS field designation	1 Request	5 hours	5
§ 203.79(c) Request extension of deadline to start construction	1 Request	2 hours	2
§ 203.81 Required reports.	Burden included with applications		0
DWRRA Reporting Subtotal	13 Reponses	N/A	4,188 Hours
	Processing Fees = $286,600
Recordkeeping Burden
§ 203.91 Retain supporting cost records for post-production development/fabrication reports (records retained as usual/customary business practice; minimal burden to make available at MMS request	2 Record-keepers	8	16 Hours
Total Annual Burden	19 Responses	N/A	4,855 Hours
* CPA certification expense burden also imposed on applicant.

Comments: 3 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. In calculating the burden, we assumed that respondents perform many of the 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.

(1) We specifically solicit your comments on the following questions:

(a) Is the proposed collection of information necessary for us to properly perform our functions, and will it be useful?

(b) Are the estimates of the burden hours of the proposed collection reasonable?

(c) Do you have any suggestions that would enhance the quality, clarity, or usefulness of the information to be collected?

(d) Is there a way to minimize the information collection burden on respondents, including through the use of appropriate automated electronic, mechanical, or other forms of information technology?

(2) In addition, the PRA requires agencies to estimate the total annual reporting “non-hour cost” burden to respondents or recordkeepers resulting from the collection of information. In addition to the costs previously discussed, we need to know if you have other costs associated with the collection of this information for either total capital and startup cost components or annual operation, maintenance, and purchase of service components. Your estimates should consider the costs to generate, maintain, and disclose or provide the information. 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, drilling, 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.

MMS Information Collection Clearance Officer: Jo Ann Lauterbach, [phone]).

Dated: May 2, 2000.

John V. Mirabella,

Acting Chief, Engineering and Operations Division.