05-15532. 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 of a currently approved information collection (OMB Control Number 1010-0073).

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 220. This notice also provides the public a second opportunity to comment on the paperwork burden of these regulatory requirements. The previous title of this ICR was “30 CFR part 220, Accounting Procedures for Determining Net Profit Share Payment for Outer Continental Shelf Oil and Gas Leases.” The new title of this ICR is “30 CFR part 220—Accounting Procedures for Determining Net Profit Share Payment for Outer Continental Shelf Oil and Gas Leases, § 220.010 NPSL capital account, § 220.030 Maintenance of records, § 220.031 Reporting and payment requirements, § 220.032 Inventories, and § 220.033 Audits.”

DATES:

Submit written comments on or before September 6, 2005.

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 1010-0073). Mail your comments to Sharron L. Gebhardt, Lead Regulatory Specialist, Chief of Staff Office, 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 220—Accounting Procedures for Determining Net Profit Share Payment for Outer Continental Shelf Oil and Gas Leases, § 220.010 NPSL capital account, § 220.030 Maintenance of records, § 220.031 Reporting and payment requirements, § 220.032 Inventories, and § 220.033 Audits.

OMB Control Number: 1010-0073.

Bureau Form Number: None.

Abstract: The Secretary of the U.S. 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 under the Mineral Leasing Act (30 U.S.C. 1923) and the Outer Continental Shelf Lands Act (43 U.S.C. 1353) 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 performs the royalty management functions for the Secretary.

Applicable Citations

Applicable citations of the laws are the Federal Oil and Gas Royalty Management Act of 1982 (Pub. L. 97-451—Jan. 12, 1983); the Outer Continental Shelf Lands Act of 1953 (43 U.S.C. 1353) (Pub. L. 212—Aug. 7, 1953, as amended by Pub. L. 93-627—Jan. 3, 1975, Pub. L. 95-372—Sept. 18, 1978, and Pub. L. 98-498—Oct. 19, 1984); and the Mineral Leasing Act (30 U.S.C. 1923). These citations can be viewed on our Web site at http://www.mrm.mms.gov/​Laws_​R_​D/​PublicLawsAMR.htm.

The Code of Federal Regulations (CFR) citations covering the net profit share lease (NPSL) program are located at 30 CFR part 220—Accounting Procedures for Determining Net Profit Share Payment for Outer Continental Shelf Oil and Gas Leases.

General Information

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 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 royalties or net profit share payments are properly valued and appropriately paid. Proprietary information submitted to MMS under this collection is protected, and no items of a sensitive nature are collected.

NPSL Bidding System

To encourage exploration and development of oil and gas leases on submerged Federal lands on the OCS, regulations were promulgated at 30 CFR part 260—Outer Continental Shelf Oil and Gas Leasing. Specific implementation regulations for the NPSL bidding system are promulgated at 30 CFR 260.110(d), covered under ICR 1010-0143 (expires December 31, 2006). The MMS established the NPSL bidding system to properly balance a fair market return to the Federal Government for the lease of its lands, with a fair profit to companies risking their investment capital. The system provides an incentive for early and expeditious exploration and development and provides for sharing the risks by the lessee and the Federal Government. The NPSL bidding system incorporates a fixed capital recovery system as a means through which the lessee recovers costs of exploration and development from production revenues, along with a reasonable return on investment.

NPSL Capital Account

The Federal Government does not receive a profit share payment from an NPSL until the lessee shows a credit balance in its capital account; that is, cumulative revenues and other credits exceed cumulative costs. The credit balance is multiplied by the net profit share rate (30 to 50 percent), resulting in the amount of net profit share payment due the Federal Government.

The MMS requires lessees to maintain an NPSL capital account for each lease, which transfers to a new owner when sold. Following the cessation of production, lessees are also required to provide either an annual or a monthly report to the Federal Government, using data from the capital account.

NPSL Inventories

The NPSL lessees must notify MMS of their intent to perform an inventory and file a report after each inventory of controllable materiel.

NPSL Audits

When non-operators of an NPSL call for an audit, they must notify MMS. When MMS calls for an audit, the lessee must notify all non-operators on the lease. These requirements are located at 30 CFR 220.033.

Summary

This collection of information is necessary in order to determine when net profit share payments are due and to ensure royalties or net profit share payments are properly valued and appropriately paid.

We are revising this ICR to add citations related to records management at 30 CFR 220.030(a) and inventories at § 220.032(b). We added a new citation for a PRA-exempt requirement related to audits at § 220.033(e). For clarification, we added § 220.031(c) related to payment requirements. We have not included in our estimates certain requirements performed in the normal course of business, which are considered usual and customary.

The MMS is requesting OMB's approval to continue to collect this information. Not collecting this information would limit the Secretary's ability to discharge his/her duties and may also result in loss of royalty payments. Proprietary information submitted is protected, and there are no questions of a sensitive nature included in this information collection.

Frequency: Annually, monthly, and on occasion.

Estimated Number and Description of Respondents: 9 lessees.

Estimated Annual Reporting and Recordkeeping “Hour” Burden: 1,583 hours.

All nine lessees report monthly because all current NPSLs are in producing status. Because the requirements for establishment of capital accounts at § 220.010(a) and capital account annual reporting at § 220.031(a) are necessary only during non-producing status of a lease, we included only one response annually for these requirements, in case a new NPSL is established. The following chart shows the estimated burden hours by CFR section and paragraph:

Respondents' Estimated Annual Burden Hours

Citation 30 CFR 220	Reporting & recordkeeping requirement	Hour burden	Number of annual responses	Annual burden hours
PART 220—ACCOUNTING PROCEDURES FOR DETERMINING NET PROFIT SHARE PAYMENT FOR OUTER CONTINENTAL SHELF OIL AND GAS LEASES
§ 220.010 NPSL capital account.
220.010(a)	(a) For each NPSL tract, an NPSL capital account shall be established and maintained by the lessee for NPSL operations * * *	1	1	1
§ 220.030 Maintenance of records
220.030(a) and (b)	(a) Each lessee * * * shall establish and maintain such records as are necessary * * *	1	9	9
§ 220.031 Reporting and payment requirements
220.031(a)	(a) Each lessee subject to this part shall file an annual report during the period from issuance of the NPSL until the first month in which production revenues are credited to the NPSL capital account * * *	16	1	16
220.031(b)	(b) Beginning with the first month in which production revenues are credited to the NPSL capital account, each lessee * * * shall file a report for each NPSL, not later than 60 days following the end of each month * * *	13	108	1,404
220.031(c)	(c) Each lessee subject to this Part 220 shall submit, together with the report required * * * any net profit share payment due * * *	Burden hours covered under 220.031(b).
220.031(d)	(d) Each lessee * * * shall file a report not later than 90 days after each inventory is taken * * *	8	9	72
220.031(e)	(e) Each lessee * * * shall file a final report, not later than 60 days following the cessation of production * * *	4	9	36
§ 220.032 Inventories
220.032(b)	(b) At reasonable intervals, but at least once every three years, inventories of controllable materiel shall be taken by the lessee. Written notice of intention to take inventory shall be given by the lessee at least 30 days before any inventory is to be taken so that the Director may be represented at the taking of inventory * * *	1	9	9
§ 220.033 Audits
220.033(b)(1)	(b)(1) When nonoperators of an NPSL lease call an audit in accordance with the terms of their operating agreement, the Director shall be notified of the audit call * * *	2	9	18
220.033(b)(2)	(b)(2) If DOI determines to call for an audit, DOI shall notify the lessee of its audit call and set a time and place for the audit. * * * The lessee shall send copies of the notice to the nonoperators on the lease * * *	2	9	18
220.033(e)	(e) Records required to be kept under § 220.030(a) shall be made available for inspection by any authorized agent of DOI * * *	The Office of Regulatory Affairs has determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
Total Burden			164	1,583

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 November 16, 2004 (69 FR 67162), 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 September 6, 2005.

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 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: May 9, 2005.

Lucy Querques Denett,

Associate Director for Minerals Revenue Management.