00-20079. Agency Information Collection Activities: Submitted for Office of Management and Budget (OMB) Review; 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:

To comply with the Paperwork Reduction Act of 1995 (PRA), we are submitting to OMB for review and approval an information collection request (ICR), titled “30 CFR Part 203, Relief or Reduction in Royalty Rates.” We are also soliciting comments from the public on this ICR.

DATE:

Submit written comments by September 11, 2000.

ADDRESSES:

You may submit comments directly to the Office of Information and Regulatory Affairs, OMB, Attention: Desk Officer for the Department of the Interior (1010-0071), 725 17th Street, NW., Washington, DC 20503. Mail or hand carry a copy of your 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 at no cost of our submission to OMB, which includes the regulations that require this information to be collected.

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 requests 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.

We 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.

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

On May 11, 2000, we published a Federal Register notice (65 FR 30431) with the required 60-day comment period announcing that we would submit this collection of information to OMB for approval. We received no comments in response to the notice.

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: 8,650 burden 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, for a total of $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 (CPA). Under § 203.81, a report prepared by an independent 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 seven 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	Annual responses	Hours per response	Annual burden hours
OCS Lands Act Reporting
Application/Audit fees
Application—leases that generate earnings that can't sustain continued production (end-of-life lease)	2 Applications	100 hours	200
	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, 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 and are producing (deep water expansion project)	1 Application	2,000 hours	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 11/28/2000, that have not produced (pre-act or post-2000 deep water leases)	1 Application	2,000 hours	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 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 × $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.	1 Redetermination	500 hours	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 hours	40
§ 203.70, 203.81, 203.90, 203.92—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	4 Requests	400 hours	1,600
§ 203.79(c)—Request extension of deadline to start construction	1 Request	2 hours	2
§ 203.81, 203.83 thru 203.89—Required reports	Burden included with applications		0
DWRRA Reporting Subtotal	13 Reponses	N/A	8,183
	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)	2 Record-keepers	8	16
Total Annual Burden	19 Responses	N/A	8,650
* CPA certification expense burden also imposed on applicant.

Comments: 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. 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.

If you wish to comment in response to this notice, send your comments directly 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 September 11, 2000.

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

Dated: July 26, 2000.

E.P. Danenberger,

Chief, Engineering and Operations Division.