E6-7440. Agency Information Collection Activities: Submitted for Office of Management and Budget (OMB) Review; Comment Request

AGENCY:

Minerals Management Service (MMS), Interior.

ACTION:

Notice of an extension of a currently approved information collection (OMB Control Number 1010-0155).

SUMMARY:

To comply with the Paperwork Reduction Act of 1995 (PRA), we are notifying the public that we have submitted to OMB an information collection request (ICR) to renew approval of the paperwork requirements in the regulations under 30 CFR part 204—Alternatives for Marginal Properties, subpart C—Accounting and Auditing Relief. This notice also provides the public a second opportunity to comment on the paperwork burden of these regulatory requirements. This ICR is titled “30 CFR part 204—Alternatives for Marginal Properties, Subpart C—Accounting and Auditing Relief.” This ICR covers the regulatory language under 30 CFR part 204, as published in the Accounting and Auditing Relief for Marginal Properties final rule on September 13, 2004 (69 FR 55076). This citation explains how lessees and their designees can obtain accounting and auditing relief for production from Federal oil and gas leases and units and communitization agreements that qualify as marginal properties.

DATES:

Submit written comments on or before June 15, 2006.

ADDRESSES:

Submit written comments by either FAX [phone] or e-mail ([e-mail]) directly to the Office of Information and Regulatory Affairs, OMB, Attention: Desk Officer for the Department of the Interior (OMB Control Number 1010-0155). Mail your 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, 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. Submit electronic comments as an ASCII file avoiding the use of special characters and any form of encryption. 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], e-mail [e-mail]. You may also contact Sharron Gebhardt to obtain, at no cost, a copy of the regulations that require the subject collection of information.

SUPPLEMENTARY INFORMATION:

Title: 30 CFR part 204—Alternatives for Marginal Properties, Subpart C—Accounting and Auditing Relief.

OMB Control Number: 1010-0155.

Bureau Form Number: None.

Abstract: The Secretary of the U.S. Department of the Interior is responsible for collecting royalties from lessees who produce minerals from leased Federal lands. The Secretary is required by various laws to manage mineral resources production on Federal lands, collect the royalties due, and distribute the funds in accordance with those laws. The product valuation determination process is essential to assure that royalty payments are based on the proper value of the minerals being removed. The MMS performs the royalty management functions for the Secretary.

Minerals produced from Federal leases vary greatly in the nature of occurrence, markets served, and production and processing methods. 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 accurately valued and appropriately paid.

Applicable citations of the laws pertaining to the accounting and auditing relief include:

(1) 30 CFR part 204;

(2) Sections 6 and 7 of Public Law 104-185—Aug. 13, 1996 (Federal Oil and Gas Royalty Simplification and Fairness Act of 1996 [RSFA]), as corrected by Public Law 104-200-Sept. 22, 1996; and

(3) Section 111 of Public Law 97-451—Jan. 12, 1983 (Federal Oil and Gas Royalty Management Act of 1982 [FOGRMA]).

Section 7 of RSFA provides for MMS and states concerned to determine, on a case-by-case basis, the amount of marginal production that may be subject to either prepayment of royalty or accounting and auditing relief. The MMS amended its regulations in 2004 to provide guidance to lessees and designees seeking accounting and auditing relief for Federal marginal properties. For purposes of section 7, RSFA does not define marginal property but does say that any granted alternative is to promote production, reduce administrative costs, and increase net receipts to the Federal Government and the states. Under section 7, RSFA also provides that the state concerned with a marginal property must approve any use of an alternative.

There are two types of relief: cumulative royalty reports and payments relief, and other relief. Under 30 CFR 204.202, MMS requires notification from lessees or designees who request to take the cumulative royalty reporting and payment relief option. Under 30 CFR 204.203, MMS requires a relief request from lessees or designees who want to obtain any other type of accounting and auditing relief. This information collection is voluntary; only those lessees or designees who choose to obtain relief must supply this information.

A state may decide in advance that it will or will not allow one or both of the relief options for each particular year. To help states decide whether to allow one or both of the relief options, MMS will send states a Report of Marginal Properties by October 1 preceding the calendar year. Each state must notify MMS of its intent to allow or not allow one or both of the relief options by November 1 preceding the same calendar year.

The MMS will determine, depending on the type of accounting and auditing relief being sought by the lessee or designee, that a lessee or designee must file either a notification or a request for relief with MMS to obtain the applicable form of relief provided for under RSFA section 7. This will allow the lessee or designee to specify the type of relief requested under RSFA section 7 on a case-by-case basis.

For the other relief option, MMS and the state concerned will use the information supplied by the lessee or designee in their relief request to (1) identify the person making the request; (2) identify the marginal property for which relief is being requested; (3) determine the relief being sought by the lessee or designee; (4) determine if the relief should be granted or denied; and (5) monitor the lessee's continuing eligibility of the relief being taken. After consulting with the state concerned, MMS will either approve, deny, or modify requests in writing. Under RSFA section 7, both MMS and a state concerned with a marginal property must approve any accounting and auditing relief granted for a marginal property. Therefore, MMS and the state concerned must determine that the relief is in the best interests of the Federal Government and the state concerned.

Notification is required of lessees or designees who wish to take the cumulative reporting and payment relief option. A relief request is required of lessees or designees who wish to obtain any other type of individual accounting and auditing relief. This information collection under this rule is voluntary; only those lessees or designees who choose to obtain or retain the benefit of accounting and auditing relief must supply this information.

A response is required to obtain the benefit of accounting and auditing relief.

Proprietary information submitted to MMS under this collection is protected, and no items of a sensitive nature are collected.

Frequency: For Federal lessees/designees, one time, and then again only if changes occur; for states, annually.

Estimated Number and Description of Respondents: 1,010 Federal lessees/designees and 15 states.

Estimated Annual Reporting and Recordkeeping “Hour” Burden: 406 hours.

With participation in the relief program offered in 30 CFR part 204, MMS estimates an annual reporting burden hour saving of 694 hours for each subsequent year. This annual reporting burden hour saving is reflected in ICR 1010-0140 (expires 10/31/2006). We estimate approximately 138 total responses—134 responses from 1,010 Federal lessees/designees; and 4 responses from 15 states. Each state requires an annual in-depth analysis informing MMS of their decision to participate or not participate in accounting and auditing relief. 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:

Respondent's Estimated Annual Burden Hours

Citation 30 CFR 204	Reporting and recordkeeping requirement	Hour burden	Average number of annual responses	Annual burden hours
PART 204—ALTERNATIVES FOR MARGINAL PROPERTIES Subpart C—Accounting and Auditing Relief
204.202(b)(1)	§ 204.202 What is the cumulative royalty reports and payments relief option? (b) To use the cumulative royalty reports and payments relief option, you must do all of the following (1) Notify MMS in writing by January 31 of the calendar year for which you begin taking your relief. * * *	2	100	200
204.202(b)(2)	§ 204.202 What is the cumulative royalty reports and payments relief option? (2) Submit your royalty report and payment * * * by the end of February of the year following the calendar year for which you reported annually, * * * If you have an estimated payment on file, you must submit your royalty report and payment by the end of March of the year following the calendar year for which you reported annually; (3) Use the sales month prior to the month that you submit your annual report and payment * * * for the entire previous calendar year's production for which you are paying annually.* * *	Burden covered under OMB Control Number 1010-0140 (expires 10/31/2006).
204.202(b)(4), (b)(5), (c), (d)(1), (d)(2), (e)(1), and (e)(2)	§ 204.202 What is the cumulative royalty reports and payments relief option? (b) To use the cumulative royalty reports and payments relief option, you must * * * (4) Report one line of cumulative royalty information on Form MMS-2014 for the calendar year, * * * and (5) Report allowances on Form MMS-2014 on the same annual basis as the royalties for your marginal property production. (c) If you do not pay your royalty by the date due in paragraph (b) of this section, you will owe late payment interest * * * from the date your payment was due under this section until the date MMS receives it. * * * (e) If you dispose of your ownership interest in a marginal property for which you have taken relief * * * you must: (1) Report and pay royalties for the portion of the calendar year for which you had an ownership interest; and (2) Make the report and payment by the end of the month after you dispose of the ownership interest in the marginal property. If you do not report and pay timely, you will owe interest * * * from the date the payment was due * * *	Burden covered under OMB Control Number 1010-0140 (expires 10/31/2006).
204.203(b)	§ 204.203 What is the other relief option? (b) You must request approval from MMS * * * before taking relief under this option	4	10	40
204.205(a) and (b)	§ 204.205 How do I obtain accounting and auditing relief? (a) To take cumulative reports and payments relief under § 204.202, you must notify MMS in writing by January 31 of the calendar year for which you begin taking your relief. (b) To obtain other relief under § 204.203, you must file a written request for relief with MMS	Hour burden covered under § 204.203(b).
204.206(a)(3)(i) and (b)(1)	§ 204.206 What will MMS do when it receives my request for other relief? When MMS receives your request for other relief under § 204.205(b), it will notify you in writing as follows: (a) If your request for relief is complete, MMS may either approve, deny, or modify your request in writing after consultation with any State * * * (3) If MMS modifies your relief request, MMS will notify you of the modifications. (i) You have 60 days from your receipt of MMS's notice to either accept or reject any modification(s) in writing. (b) If your request for relief is not complete, MMS will notify you in writing * * * (1) You must submit the missing information within 60 days of your receipt of MMS's notice * * *	Hour burden covered under § 204.203(b).
204.208 (c)(1) and (d)(1)	§ 204.208 May a State decide that it will or will not allow one or both of the relief options under this subpart? (c) If a State decides * * * that it will or will not allow one or both of the relief options * * * within 30 days * * * the State must: (1) Notify the Associate Director for Minerals Revenue Management, MMS, in writing, of its intent to allow or not allow one or both of the relief options * * * (d) If a State decides in advance * * * that it will not allow one or both of the relief options * * * the State must: (1) Notify the Associate Director for Minerals Revenue Management, MMS, in writing, of its intent to allow one or both of the relief options * * *	40	4	160
204.209(b)	§ 204.209 What if a property ceases to qualify for relief obtained under this subpart? (b) If a property is no longer eligible for relief * * * the relief for the property terminates as of December 31 of that calendar year. You must notify MMS in writing by December 31 that the relief for the property has terminated	.25	24	6
204.210(c) and (d)	§ 204.210 What if a property is approved as part of a nonqualifying agreement? (c) * * * the volumes on which you report and pay royalty * * * must be amended to reflect all volumes produced on or allocated to your lease under the nonqualifying agreement as modified by BLM * * * Report and pay royalties for your production using the procedures in § 204.202(b). (d) If you owe additional royalties based on the retroactive agreement approval and do not pay your royalty by the date due in § 204.202(b), you will owe late payment interest determined under 30 CFR 218.54 from the date your payment was due under § 204.202(b)(2) until the date MMS receives it.	Burden covered under OMB Control Number 1010-0140 (expires 10/31/2006).
204.214(b)(1) and (b)(2)	§ 204.214(b) Is minimum royalty due on a property for which I took relief? (b) If you pay minimum royalty on production from a marginal property during a calendar year for which you are taking cumulative royalty reports and payment relief, and: (1) The annual payment you owe under this subpart is greater than the minimum royalty you paid, you must pay the difference between the minimum royalty you paid and your annual payment due under this subpart; or (2) The annual payment you owe under this subpart is less than the minimum royalty you paid, you are not entitled to a credit because you must pay at least the minimum royalty amount on your lease each year.	Burden covered under OMB Control Number 1010-0140 (expires 10/31/2006).
Total			138	406

Estimated Annual Reporting and Recordkeeping “Non-hour” Cost Burden: We have identified no “non-hour” cost burdens.

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: Section 3506(c)(2)(A) of the PRA 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.

To comply with the public consultation process, we published a notice in the Federal Register on June 3, 2005 (70 FR 32647), announcing that we would submit this ICR to OMB for approval. The notice provided the required 60-day comment period. We received no comments in response to the notice.

If you wish to comment in response to this notice, you may send your comments to the offices listed under the ADDRESSES section of this notice. The OMB has up to 60 days to approve or disapprove the information collection but may respond after 30 days. Therefore, to ensure maximum consideration, OMB should receive public comments by June 15, 2006.

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/​InfoColl/​InfoColCom.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. 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: December 28, 2005.

Cathy J. Hamilton,

Acting Associate Director for Minerals Revenue Management.

Editorial Note:

This document was received at the Office of the Federal Register on May 11, 2006.