05-14528. Agency Information Collection Activities: Proposed Collection, Comment Request

AGENCY:

Minerals Management Service (MMS), Interior.

ACTION:

Notice of a revision of a currently approved information collection (OMB Control Number 1010-0136).

SUMMARY:

To comply with the Paperwork Reduction Act (PRA) of 1995, 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 new title of this information collection request (ICR) is titled “30 CFR PART 206—PRODUCT VALUATION, subpart C—Federal Oil and subpart D—Federal Gas (Form MMS-4393, Request to Exceed Regulatory Allowance Limitation).” We changed the title of this information collection request (ICR) to clarify the regulatory language we are covering under 30 CFR part 206, and to incorporate relevant portions of three previous ICRs. The three ICRs, now consolidated into this ICR, were previously titled:

• 1010-0095: 30 CFR Part 206—Product Valuation (Request to Exceed Transportation and Processing Allowance Limitation), subpart B—Indian Oil, § 206.54(b)(2); subpart C—Federal Oil, § 206.109(c)(2); subpart D—Federal Gas, §§ 206.156(c)(3), 206.158(c)(3), and 206.158(d)(2)(i); and subpart E—Indian Gas, §§ 206.177(c)(2) and 206.177(c)(3);
• 1010-0136: 30 CFR 206—subpart C, Federal Oil Valuation; and
• 1010-0157: 30 CFR 206—subpart C, Federal Oil.

Citations concerning Indian oil and gas, referred to in the above three ICRs, are currently covered in ICR 1010-0103.

DATES:

Submit written comments on or before September 20, 2005.

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, 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], or e-mail [e-mail].

SUPPLEMENTARY INFORMATION:

Title: 30 CFR PART 206—PRODUCT VALUATION, subpart C—Federal Oil and subpart D—Federal Gas (Form MMS-4393, Request to Exceed Regulatory Allowance Limitation).

OMB Control Number: 1010-0136.

Bureau Form Number: Form MMS-4393.

Abstract: The Department of the Interior is responsible for matters relevant to mineral resource development on Federal and Indian lands and the Outer Continental Shelf (OCS). The Secretary of the Interior is responsible for managing the production of minerals from Federal and Indian lands and the OCS, collecting royalties from lessees who produce minerals, and distributing the funds collected in accordance with applicable laws. The MMS assists the Secretary in performing the royalty management functions.

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.

Section 101(a) of the Federal Oil and Gas Royalty Management Act of 1982 (FOGRMA), as amended, requires that the Secretary “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.” In order to accomplish these tasks, MMS developed valuation regulations for Federal leases at 30 CFR part 206—Product Valuation. Market value is a basic principle underlying royalty valuation. Consequently, these regulations include methods to capture the true market value of crude oil and gas produced from Federal leases, both onshore and offshore. The valuation regulations at 30 CFR part 206 require companies to collect and/or submit information used to value their Federal oil and gas.

The MMS uses the information collected to ensure that proper royalty is paid on oil and gas produced from Federal onshore and offshore leases. Please refer to the chart for all reporting requirements and associated burden hours. Regulations developed ensure the information requested is the minimum necessary to carry out our mission and places the least possible burden on respondents. The requested information provides a critical link to establishing the proper value of oil and gas from Federal lands. If the information is not collected, it may result in a loss of royalties for both Federal and state governments.

Transportation and Processing Allowances

Under certain circumstances, lessees are authorized to claim a transportation allowance for the reasonable actual costs of transporting the royalty portion of produced oil and gas from the lease to a processing or sales point not in the immediate lease area.

When gas is processed for the recovery of gas plant products, lessees may claim a processing allowance. Transportation and processing allowances are a part of the product valuation process that MMS uses to determine if the lessee is reporting and paying the proper royalty amount.

The regulations establish a limit on transportation allowance deductions for oil and gas at 50 percent of the value of the oil and gas at the point of sale. The MMS may approve a transportation allowance in excess of 50 percent upon proper application from the lessee. Similarly, the regulations establish a limit of 662/3 percent of the value of each gas plant product as an allowable gas processing deduction. The MMS may also approve a processing allowance in excess of 662/3 percent upon proper application from the lessee.

Request To Exceed Regulatory Allowance Limitation

The MMS may approve an allowance exceeding the regulatory allowance limit upon proper application from the lessee. To request permission to exceed a regulatory allowance limit, lessees must write a letter to MMS explaining why a higher allowance limit is necessary and provide supporting documentation. The MMS developed Form MMS-4393, Request to Exceed Regulatory Allowance Limitation, to accompany the lessee's letter requesting approval to exceed the regulatory allowance limit. This form provides MMS with the data necessary to make a decision and track deductions on royalty reports. Data reported on the form is also subject to subsequent audit and adjustment.

Proprietary information submitted to MMS under this collection is protected, and no items of a sensitive nature are collected. A response is mandatory for valuation requirements and required to obtain the benefit of allowances.

Applicable Citations

Applicable citations of the laws pertaining to mineral leases include Public Law 97-451—Jan. 12, 1983 (Federal Oil and Gas Royalty Management Act of 1982 [FOGRMA]); 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); the Mineral Leasing Act of 1920, Section 36, as amended (30 U.S.C. 192); Outer Continental Shelf Lands Act of 1953, Section 27, as amended (43 U.S.C. 1353); 30 U.S.C. 189 pertaining to Public Lands; 30 U.S.C. 359 pertaining to Acquired Lands; and 43 U.S.C. 1334 pertaining to OCS Lands. Public laws pertaining to mineral royalties are located on our Web site at http://www.mrm.mms.gov/​Laws_​R_​D/​PublicLawsAMR.htm.

The applicable regulations include 30 CFR part 206—Product Valuation. In addition, we also are including applicable citations from the 2004 Federal Oil Valuation Rule (69 FR 24959, published May 5, 2004) and the 2005 Federal Gas Valuation Rule (70 FR 11869, published March 10, 2005).

Frequency of Response: Monthly, and when necessary, annually.

Estimated Number and Description of Respondents: 100 Federal lessees.

Estimated Annual Reporting and Recordkeeping “Hour” Burden: 21,815 hours.

We are revising this ICR to include non-standard reporting requirements that were overlooked in the previous renewal, and we have adjusted the burden hours accordingly. The hours also reflect our recent analysis related to the implementation of the 2004 Federal Oil Valuation rule and the 2005 Federal Gas Valuation rule. 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 breakdown of the estimated burden hours by CFR section and paragraph:

Respondents' Estimated Annual Burden Hours

Citation 30 CFR 206	Reporting and recordkeeping requirement	Hour burden	Average number of annual responses	Annual burden hours
Subpart C—Federal Oil
§ 206.102 How do I calculate royalty value for oil that I or my affiliate sell(s) under an arm's-length contract?
206.102(e)(1)	206.102(e) If you value oil under paragraph (a) of this section: (1) MMS may require you to certify that your or your affiliate's arm's-length contract provisions include all of the consideration the buyer must pay, either directly or indirectly, for the oil	PRODUCE RECORDS—The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
§ 206.103 How do I value oil that is not sold under an arm's-length contract?
206.103	This section explains how to value oil that you may not value under § 206.102 or that elect under § 206.102(d) to value under this section. First determine whether paragraph (a), (b), or (c) of this section applies to production from your lease, or whether you may apply paragraph (d) or (e) with MMS approval	33.25	5	166.25
206.103(a)	206.103 (a) Production from leases in California or Alaska. Value is the average of the daily mean ANS spot prices published in any MMS-approved publication during the trading month most concurrent with the production month * * * (1) To calculate the daily mean spot price * * * (2) Use only the days * * * (3) You must adjust the value * * *
206.103(a)(4)	206.103(a)(4) After you select an MMS-approved publication, you may not select a different publication more often than once every 2 years, * * *	8	2	16
206.103(b)(1)	206.103(b) Production from leases in the Rocky Mountain Region. * * * (1) If you have an MMS-approved tendering program, you must value oil * * *	400	2	800
206.103(b)(1)(ii)	206.103(b)(1)(ii) If you do not have an MMS-approved tendering program, you may elect to value your oil under either paragraph (b)(2) or (b)(3) of this section. * * *	400	2	800
206.103(b)(4)	206.103(b)(4) If you demonstrate to MMS's satisfaction that paragraphs (b)(1) through (b)(3) of this section result in an unreasonable value for your production as a result of circumstances regarding that production, the MMS Director may establish an alternative valuation method	400	2	800
206.103(c)(1)	206.103(c) Production from leases not located in California, Alaska or the Rocky Mountain Region. (1) Value is the NYMEX price, plus the roll, adjusted for applicable location and quality differentials and transportation costs under § 206.112	50	10	500
206.103(e)(1)	206.103(e) Production delivered to your refinery and the NYMEX price or ANS spot price is an unreasonable value. (1) * * * you may apply to the MMS Director to establish a value representing the market at the refinery if: * * *	330	2	660
206.103(e)(2)	206.103(e)(2) You must provide adequate documentation and evidence demonstrating the market value at the refinery * * *
§ 206.105 What records must I keep to support my calculations of value under this subpart?
206.105	206.105 If you determine the value of your oil under this subpart, you must retain all data relevant to the determination of royalty value. * * *	There are no burden hours to report in this ICR. All burden hours associated with Form MMS-2014 are included in OMB Control Number 1010-0140 (Form MMS-2014), expires 10/31/2006.
§ 206.107 How do I request a value determination?
206.107(a)	206.107(a) You may request a 330 82,640 value determination from MMS * * *	330	8	2,640
§ 206.109 When may I take a transportation allowance in determining value?
206.109(c)(2)	206.109(c) Limits on transportation allowances. (2) You may ask MMS to approve a transportation allowance in excess of the limitation in paragraph (c)(1) of this section * * * Your application for exception (using Form MMS-4393, Request to Exceed Regulatory Allowance Limitation) must contain all relevant and supporting documentation necessary for MMS to make a determination. * * *	4.25	1	4.25
§ 206.110 How do I determine a transportation allowance under an arm's-length transportation contract?
206.110(a)	206.110(a) * * * You must be able to demonstrate that you or your affiliate's contract is at arm's length. * * *	PRODUCE RECORDS—The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
206.110(d)(3)	216.110(d) If your arm's-length transportation contract includes more than one liquid product, and the transportation costs attributable to each product cannot be determined * * *
	(3) You may propose to MMS a cost allocation method * * *	330	2	660
206.110(e)	206.110(e) If your arm's-length transportation contract includes both gaseous and liquid products, and the transportation costs attributable to each product cannot be determined from the contract, then you must propose an allocation procedure to MMS	330	1	330
206.110(e)(1)	206.110(e)(1) * * * If MMS rejects your cost allocation, you must amend your Form MMS-2014 * * *	There are no burden hours to report in this ICR. All burden hours associated with Form MMS-2014 are included in OMB Control Number 1010-0140 (Form MMS-2014), expires 10/31/2006.
206.110(e)(2)	206.110(e)(2) You must submit your initial proposal, including all available data, within 3 months after first claiming the allocated deductions on Form MMS-2014	There are no burden hours to report in this ICR. All burden hours associated with Form MMS-2014 are included in OMB Control Number 1010-0140, (Form MMS-2014), expires 10/31/2006.
206.110(g)(2)	206.110(g) If your arm's-length sales includes a provision reducing the contract price by a transportation factor, * * * (2) You must obtain MMS approval before claiming a transportation factor in excess of 50 percent of the base price of the product	330	1	330
§ 206.111 How do I determine a transportation allowance if I do not have an arm's-length transportation contract or arm's-length tariff?
206.111(g)	206.111(g) To compute depreciation, you may elect to use either * * * After you make an election, you may not change methods without MMS approval. * * *	330	1	330
206.111(k)(2)	206.111(k)(2) You may propose to MMS a cost allocation method on the basis of the values * * *	330	1	330
206.111(l)(1)	206.111(l)(1) Where you transport both gaseous and liquid products through the same transportation system, you must propose a cost allocation procedure to MMS	330	1	330
206.111(l)(2)	206.111(l)(2) * * * If MMS rejects your cost allocation, you must amend your Form MMS-2104 for the month/months that you used the rejected method and pay any additional royalty and interest due	There are no burden hours to report in this ICR. All burden hours associated with your Form MMS-2104 are included in OMB Control Number 1010-0140 (Form MMS-2014), expires 10/31/2006.
206.111(l)(3)	206.111(l)(3) You must submit your initial proposal, including all available data, within 3 months after first claiming the allocated deductions on Form MMS-2014	Burden covered under § 206.111(l)(1).
§ 206.112 What adjustments and transportation allowances apply when I value oil production from my lease using NYMEX prices or ANS spot prices?
206.112(a)(1)(ii)	206.112(a)(1)(ii) * * * under an exchange agreement that is not at arm's length, you must obtain approval from MMS for a location and quality differential. * * *.	330	1	330
206.112(a)(1)(ii)	206.112(a)(1)(ii) * * * If MMS prescribes a different differential, you must apply * * *. You must pay any additional royalties owed * * * plus the late payment interest from the original royalty due date, or you may report a credit * * *	330	2	660
206.112(a)(3)	206.112(a)(3) If you transport or exchange at arm's length (or both transport and exchange) at least 20 percent, but not all, of your oil produced from the lease to a market center, determine the adjustment between the lease and the market center for the oil that is not transported or exchanged (or both transported and exchanged) to or through a market center as follows: * * *	330	4	1,320
206.112(a)(4)	206.112(a)(4) If you transport or exchange (or both transport and exchange) less than 20 percent of your crude oil produced from the lease between the lease and a market center, you must propose to MMS an adjustment between the lease and the market center for the portion of the oil that you do not transport or exchange (or both transport and exchange) to a market center. * * *	330	4	1,320
206.112(a)(4)	206.112(a)(4) If MMS prescribes a different adjustment * * *. You must pay any additional royalties owed * * * plus the late payment interest from the original royalty due date, or you may report a credit * * *
206.112(b)(3)	206.112(b)(3) * * * you may propose an alternative differential to MMS. * * * If MMS prescribes a different differential * * *. You must pay any additional royalties owed * * * plus the late payment interest from the original royalty due date, or you may report a credit * * *	330	4	1,320
206.112(c)(2)	206.112(c)(2) * * * If quality bank adjustments do not incorporate or provide for adjustments for sulfur content, you may make sulfur adjustments, based on the quality of the representative crude oil at the market center, of 5.0 cents per one-tenth percent difference in sulfur content, unless MMS approves a higher adjustment	330	2	660
§ 206.114 What are my reporting requirements under an arm's-length transportation contract?
206.114	206.114 You or your affiliate must use a entry on Form MMS 2014 to notify MMS of an allowance based on transportation costs you or your affiliate incur	There are no burden hours to report in this ICR. All burden hours associated with Form MMS-2014 are included in OMB Control Number 1010-0140 (Form MMS-2014), expires 10/31/2006.
206.114	206.114 MMS may require you or your affiliate to submit arm's-length transportation contracts, production agreements, operating agreements, and related documents	PRODUCE RECORDS—The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
§ 206.115 What are my reporting requirements under a non-arm's-length transportation arrangement?
206.115(a)	206.115(a) You or your affiliate must use a separate entry on Form MMS-2014 to notify MMS of an allowance based on transportation costs you or your affiliate incur	There are no burden hours to report in this ICR. All burden hours associated with Form MMS-2014 are included in OMB Control Number 1010-0140 (Form MMS-2014), expires 10/31/2006.
206.115(c)	206.115(c) MMS may require you or your affiliate to submit all data used to calculate the allowance deduction. * * *	PRODUCE RECORDS—The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
Subpart D—Federal Gas
§ 206.152 Valuation standards—unprocessed gas.
206.152(b)(1)(i)	206.152(b)(1)(i) * * * The lessee shall have the burden of demonstrating that its contract is arm's-length. * * *	PRODUCE RECORDS—The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
206.152(b)(1)(iii)	206.152(b)(1)(iii) * * * When MMS determines that the value may be unreasonable, MMS will notify the lessee and give the lessee an opportunity to provide written information justifying the lessee's value	PRODUCE RECORDS—The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
206.152(b)(2)	206.152(b)(2) * * * The lessee must request a value determination in accordance with paragraph (g) of this section for gas sold pursuant to a warranty contract; * * *	330	1	330
206.152(b)(3)	206.152(b)(3) MMS may require a lessee to certify that its arm's-length contract provisions include all of the consideration to be paid by the buyer, either directly or indirectly, for the gas	PRODUCE RECORDS—The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
206.152(e)(1)	206.152(e)(1) Where the value is determined pursuant to paragraph (c) of this section, the lessee shall retain all data relevant to the determination of royalty value. * * *	There are no burden hours to report in this ICR. All burden hours associated with Form MMS-2014 are included in OMB Control Number 1010-0140 (Form MMS-2014), expires 10/31/2006.
206.152(e)(2)	206.152(e)(2) Any Federal lessee will make available upon request to the authorized MMS or State representatives, to the Office of the Inspector General of the department of the Interior, or other person authorized to receive such information, arm's-length sales and volume data for like-quality production sold, purchased or otherwise obtained by the lessee from the field or area or from nearby fields or areas	PRODUCE RECORDS—The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
206.152(e)(3)	206.152(e)(3) A lessee shall notify MMS if it has determined value pursuant to paragraph (c)(2) or (c)(3) of this section. * * *	330	2	660
206.152(g)	206.152(g) The lessee may request a value determination from MMS. * * * the lessee shall submit all available data relevant to its proposal. * * *	330	6	1,980
§ 206.153 Valuation standards—processed gas.
206.153(b)(1)(i)	206.153(b)(1)(i) * * * The lessee shall have the burden of demonstrating that its contract is arm's-length. * * *	PRODUCE RECORDS—The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
206.153(b)(1)(iii)	206.153(b)(1)(iii) * * * When MMS determines that the value may be unreasonable, MMS will notify the lessee and give the lessee an opportunity to provide written information justifying the lessee's value	PRODUCE RECORDS—The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
206.153(b)(2)	206.153(b)(2) * * * The lessee must request a value determination in accordance with paragraph (g) of this section for gas sold pursuant to a warranty contract; * * *	330	1	330
206.153(b)(3)	206.153(b)(3) MMS may require a lessee to certify that its arm's-length contract provisions include all of the consideration to be paid by the buyer, either directly or indirectly, for the residue gas or gas plant product	PRODUCE RECORDS—The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
206.153(e)(1)	206.153(e)(1) Where the value is determined pursuant to paragraph (c) of this section, the lessee shall retain all data relevant to the determination of royalty value. * * *	There are no burden hours to report in this ICR. All burden hours associated with Form MMS-2014 are included in OMB Control Number 1010-0140 (Form MMS-2014), expires 10/31/2006.
206.153(e)(2)	206.153(e)(2) Any Federal lessee will make available upon request to the authorized MMS or State representatives, to the Office of the Inspector General of the Department of the Interior, or other persons authorized to receive such information, arm's-length sales and volume data for like-quality residue gas and gas plant products sold, purchased or otherwise obtained by the lessee from the same processing plant or from nearby processing plants	PRODUCE RECORDS—The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
206.153(e)(3)	206.153(e)(2) A lessee shall notify MMS if it has determined any value pursuant to paragraph (c)(2) or (c)(3) of this section. * * *	330	2	660
206.153(g)	206.153(g) The lessee may request a value determination from MMS * * * the lessee shall submit all available data relevant to its proposal. * * *	330	4	1,320
§ 206.154 Determination of quantities and qualities for computing royalties.
206.154(c)(4)	206.154(c)(4) * * * A lessee may request MMS approval of other methods for determining the quantity of residue gas and gas plant products allocable to each lease. * * *	330	1	330
§ 206.156 Transportation allowances—general.
206.156(c)(3)	206.156(c)(3) Upon request of a lessee, MMS may approve a transportation allowance deduction in excess of the limitation prescribed by paragraphs (c)(1) and (c)(2) of this section. * * * An application for exception (using Form MMS-4393, Request to Exceed Regulatory Allowance Limitation) shall contain all relevant and supporting documentation necessary for MMS to make a determination. * * *	4.25	4	17
§ 206.157 Determination of transportation allowances.
206.157(a)(1)(i)	206.157(a) Arm's-length transportation contracts. (1)(i) * * * The lessee shall have the burden of demonstrating that its contract is arm's-length. * * *	PRODUCE RECORDS—The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
206.157(a)(1)(i)	206.157(a)(1)(i) * * * The lessee must claim a transportation allowance by reporting it on a separate line entry on the Form MMS-2014	There are no burden hours to report in this ICR. All burden hours associated with Form MMS-2014 are included in OMB Control Number 1010-0140 (Form MMS-2014), expires 10/31/2006.
206.157(a)(1)(iii)	206.157(a)(1)(iii) * * * When MMS determines that the value of the transportation may be unreasonable, MMS will notify the lessee and give the lessee an opportunity to provide written information justifying the lessee's transportation costs	PRODUCE RECORDS—The ORA determines that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
206.157(a)(2)(ii)	206.157(a)(2)(ii) * * * the lessee may propose to MMS a cost allocation method on the basis of the values of the products transported. * * *	330	1	330
206.157(a)(3)	206.157(a)(3) If an arm's-length transportation contract includes both gaseous and liquid products and the transportation costs attributable to each cannot be determined from the contract, the lessee shall propose an allocation procedure to MMS. *** The lessee shall submit all relevant data to support its proposal. * * *	330	1	330
206.157(a)(5)	206.157(a)(5) * * * The transportation factor may not exceed 50 percent of the base price of the product without MMS approval	100	1	100
206.157(b)(1)	206.157(b) Non-arm's-length or no contract. (1) The lessee must claim a transportation allowance by reporting it on a separate line entry on the Form MMS-2014. * * *	There are no burden hours to report in this ICR. All burden hours associated with Form MMS-2014 are included in OMB Control Number 1010-0140 (Form MMS-2014), expires 10/31/2006.
206.157(b)(2)(iv)	206.157(b)(2)(iv) After a lessee has elected to use either method for a transportation system, the lessee may not later elect to change to the other alternative without approval	100	1	100
206.157(b)(2)(iv)(A)	After an election is made, the lessee may not change methods without MMS approval. * * *
206.157(b)(3)(i)	206.157(b)(3)(i) * * * Except as provided in this paragraph, the lessee may not take an allowance for transporting a product which is not royalty bearing without MMS approval	100	1	100
206.157(b)(3)(ii)	206.157(b)(3)(ii) * * * the lessee may propose to the MMS a cost allocation method on the basis of the values of the products transported	100	1	100
206.157(b)(4)	206.157(b)(4) Where both gaseous and liquid products are transported through the same transportation system, the lessee shall propose a cost allocation procedure to MMS. * * * The lessee shall submit all relevant data to support its proposal. * * *	100	1	100
206.157(b)(5)	206.157(b)(5) You may apply for an exception from the requirement to compute actual costs under paragraphs (b)(1) through (b)(4) of this section	100	1	100
206.157(c)(1)(i)	206.157(c) Reporting Requirements. (1) Arm's-length contracts. (i) You must use a separate entry on Form MMS-2014 to notify MMS of a transportation allowance	There are no burden hours to report in this ICR. All burden hours associated with Form MMS-2014 are included in OMB Control Number 1010-0140 (Form MMS-2014), expires 10/31/2006.
206.157(c)(1)(ii)	206.157(c)(1)(ii) The MMS may require you to submit arm's-lenth transportation contracts, production agreements, operating agreements, and related documents. * * *	PRODUCE RECORDS—The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
206.157(c)(2)(i)	206.157(c)(2) Non-arm's-length or no contract. (i) You must use a separate entry on Form MMS-2014 to notify MMS of a transportation allowance	There are no burden hours to report in this ICR. All burden hours associated with Form MMS-2014 are included in OMB Control Number 1010-0140 (Form MMS-2014), expires 10/31/2006.
206.157(c)(2)(iii)	206.157(c)(2)(iii) The MMS may require you to submit all data used to calculate the allowance deduction. * * *	PRODUCE RECORDS—The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
206.157(e)(2)	206.157(e) Adjustments. (2) For lessees transporting production from onshore Federal leases, the lessee must submit a corrected Form MMS-2014 to reflect actual costs, together with any payment, in accordance with instructions provided by MMS	There are no burden hours to report in this ICR. All burden hours associated with Form MMS-2014 are included in OMB Control Number 1010-0140 (Form MMS-2014), expires 10/31/2006.
206.157(e)(3)	206.157(e)(3) For lessees transporting gas production from leases on the OCS, if the lessee's estimated transportation allowance exceeds the allowance based on actual costs, the lessee must submit a corrected Form MMS-2014 to reflect actual costs, together with its payments, in accordance with instructions provided by MMS. * * *	There are no burden hours to report in this ICR. All burden hours associated with Form MMS-2014 are included in OMB Control Number 1010-0140 (Form MMS-2014), expires 10/31/2006.
206.157(f)(1)	206.157(f) Allowable costs in determining transportation allowances. * * * (1) Firm demand charges paid to pipelines. * * * if you receive a payment or credit from the pipeline for penalty refunds, rate case refunds, or other reasons, you must reduce the firm demand charge claimed on the Form MMS-2014 by the amount of that payment. You must modify Form MMS-2014 by the amount received or credited for the affected reporting period and pay any resulting royalty and late payment interest due; * * *	There are no burden hours to report in this ICR. All burden hours associated with Form MMS-2014 are included in OMB Control Number 1010-0140 (Form MMS-2014), expires 10/31/2006.
§ 206.158 Processing allowances—general.
206.158(c)(3)	206.158(c)(3) Upon request of a lessee, MMS may approve a processing allowance in excess of the limitation prescribed by paragraph (c)(2) of this section. * * * An application for exception (using Form MMS-4393, Request to Exceed Regulatory Allowance Limitation) shall contain all relevant and supporting documentation for MMS to make a determination. * * *	4.25	17	72.25
206.158(d)(2)(i)	206.158(d)(2)(i) If the lessee incurs extraordinary costs for processing gas production from a gas production operation, it may apply to MMS for an allowance for those costs * * *	9.5	2	19
206.158(d)(2)(ii)	206.158(d)(2)(ii) * * * to retain the authority to deduct the allowance the lessee must report the deduction to MMS in a form and manner prescribed by MMS	There are no burden hours to report in this ICR. All burden hours associated with Form MMS-2014 are included in OMB Control Number 1010-0140 (Form MMS-2014), expires 10/31/2006.
§ 206.159 Determination of processing allowances.
206.159(a)(1)(i)	206.159(a) Arm's-length processing contracts. (1)(i) * * * The lessee shall have the burden of demonstrating that its contract is arm's-length. * * *	PRODUCE RECORDS—The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
206.159(a)(1)(i)	206.159(a)(1)(i) * * * The lessee must claim a transportation allowance by reporting it on a separate line entry on the Form MMS-2014	There are no burden hours to report in this ICR. All burden hours associated with Form MMS-2014 are included in OMB Control Number 1010-0140. (Form MMS-2014), expires 10/31/2006.
206.159(a)(1)(iii)	206.159(a)(1)(iii) * * * When MMS determines that the value of the processing may be unreasonable, MMS will notify the lessee and give the lessee an opportunity to provide written information justifying the lessee's processing costs	PRODUCE RECORDS—The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
206.159(a)(3)	206.159(a)(3) If an arm's-length processing contract includes more than one gas plant product and the processing costs attributable to each product cannot be determined from the contract, the lessee shall propose an allocation procedure to MMS. * * * The lessee shall submit all relevant data to support its proposal. * * *	330	1	330
206.159(b)(1)	206.159(b) Non-arm's-length or no contract. (1) * * * The lessee must claim a processing allowance by reflecting it as a separate line entry on the Form MMS-2014. * * *	There are no burden hours to report in this ICR. All burden hours associated with Form MMS-2014 are included in OMB Control Number 1010-0140 (Form MMS-2014), expires 10/31/2006.
206.159(b)(2)(iv)	206.159(b)(2)(iv) * * * When a lessee has elected to use either method for a processing plant, the lessee may not later elect to change to the alternative without approval of the MMS	100	1	100
206.159(b)(2)(iv)(A)	206.159(b)(2)(iv)(A) * * * After an election is made, the lessee may not change methods without MMS approval. * * *
206.159(b)(4)	206.159(b)(4) A lessee may apply to MMS for an exception from the requirements that it compute actual costs in accordance with paragraphs (b)(1) through (b)(3) of this section. * * *	100	1	100
206.159(c)(1)(i)	206.159(c) Reporting requirements—(1) Arm's-length contracts. (i) The lessee must notify MMS of an allowance based on incurred costs by using a separate line entry on the Form MMS-2014	There are no burden hours to report in this ICR. All burden hours associated with Form MMS-2014 are included in OMB Control Number 1010-0140 (Form MMS-2014), expires 10/31/2006.
206.159(c)(1)(ii)	206.159(c)(1)(ii) The MMS may require that a lessee submit arm's-length processing contracts and related documents.* * *	PRODUCE RECORDS—The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
206.159(c)(2)(i)	206.159(c)(2) Non-arm's-length or no contract. (i) The lessee must notify MMS of an allowance based on incurred costs by using a separate line entry on the Form MMS-2014	There are no burden hours to report in this ICR. All burden hours associated with Form MMS-2014 are included in OMB Control Number 1010-0140 (Form MMS-2014), expires 10/31/2006.
206.159(c)(2)(iii)	206.159(c)(2)(iii) Upon request by MMS, the lessee shall submit all data used to prepare the allowance deduction. * * *	PRODUCE RECORDS—The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
206.159(e)(2)	206.159(e) Adjustments. (2) For lessees processing production from onshore Federal leases, the lessee must submit a corrected Form MMS-2014 to reflect actual costs, together with any payment, in accordance with instructions provided by MMS	There are no burden hours to report in this ICR. All burden hours associated with Form MMS-2014 are included in OMB Control Number 1010-0140 (Form MMS-2014), expires 10/31/2006.
206.159(e)(3)	206.159(e)(3) For lessees processing gas production from leases on the OCS, if the lessee's estimated processing allowance exceeds the allowance based on actual costs, the lessee must submit a corrected Form MMS-2014 to reflect actual costs, together with its payment, in accordance with instructions provided by MMS. * * *	There are no burden hours to report in this ICR. All burden hours associated with Form MMS-2014 are included in OMB Control Number 1010-0140 (Form MMS-2014), expires 10/31/2006.
Total			109	21,815

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: 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. We have not identified non-hour cost burdens for this information collection. 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 from the rulemaking record 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: July 14, 2005.

Richard Adamski,

Acting Associate Director for Minerals Revenue Management.