E7-15590. 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 1010-0107).

SUMMARY:

To comply with the Paperwork Reduction Act of 1995 (PRA), 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 “30 CFR Part 218, Collection of Monies Due the Federal Government.” The form associated with this collection is Form MMS-4425, Designation Form for Royalty Payment Responsibility. The previous title of this ICR was “30 CFR Part 218, Subpart A—General Provisions, 218.42 Cross-lease netting in calculation of late-payment interest; Subpart B—Oil and Gas, General, 218.52 How does a lessee designate a Designee? (Form MMS-4425, Designation Form for Royalty Payment Responsibility) and 218.53 Recoupment of overpayments on Indian mineral leases; and Subpart E—Solid Minerals—General, 218.203 Recoupment of overpayments on Indian mineral leases.”

We revised this ICR in order to enable program-wide review of all information collections for solid minerals and geothermal resources. We removed 218.203, which relates to solid minerals, from this ICR and included 218.203 in the solid minerals ICR 1010-0120 (expires October 31, 2007).

DATES:

Submit written comments on or before October 9, 2007.

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, West 6th Ave. and Kipling Blvd., 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. 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 218, Collection of Monies Due the Federal Government.

OMB Control Number: 1010-0107.

Bureau Form Number: Form MMS-4425.

Abstract: The Secretary of the U.S. Department of the Interior is responsible for collecting royalties from lessees who produce minerals from leased Federal and Indian lands. The Secretary is required by various laws to manage mineral resources production on Federal and Indian lands, collect the royalties due, and distribute the funds in accordance with those laws. The Secretary also has a trust responsibility to manage Indian lands and seek advice and information from Indian beneficiaries. The MMS performs the royalty management functions and assists the Secretary in carrying out the Department's trust responsibility for Indian lands.

Public laws pertaining to mineral royalties are on our Web site at http://www.mrm.mms.gov/​Laws_​R_​D/​PublicLawsAMR.htm. Applicable citations of the laws pertaining to mineral leases include the following:

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

2. 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. Indian Mineral Development Act of 1982 (25 U.S.C. 2101 et seq.).

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.

Designation of Designee

The Federal Oil and Gas Royalty Simplification and Fairness Act of 1996 (RSFA), Public Law 104-185, as corrected by Public Law 104-200, established that lessees (owners, primarily, of operating rights, or secondarily, lease record title) are responsible for making royalty and related payments on Federal oil and gas leases. These RSFA requirements are codified at 218.52. It is common, however, for a payor rather than a lessee to make these payments. When a payor makes payments on behalf of a lessee, RSFA section 6(g) requires that the lessee designate the payor as its designee and notify MMS of this arrangement in writing. The MMS designed Form MMS-4425, Designation Form for Royalty Payment Responsibility, to request all the information necessary for lessees to comply with these RSFA requirements when they choose to designate an agent to pay for them.

Cross-Lease Netting in Calculation of Late-Payment Interest

Regulations at 218.54 require MMS to assess interest on unpaid or underpaid amounts. The MMS distributes these interest revenues to states, Indians, and the U.S. Treasury, based on financial lease distribution information. Current regulations at 218.42 provide that an overpayment on a lease or leases may be offset against an underpayment on a different lease or leases to determine the net payment subject to interest, when certain conditions are met. This is called cross-lease netting. However, RSFA sections 6(a), (b), and (c) require MMS to pay interest on lessees' Federal oil and gas overpayments made on or after February 13, 1997 (6 months after the August 13, 1996 enactment of RSFA). The MMS implemented this RSFA provision in 1997 and began calculating interest on both underpayments and overpayments for Federal oil and gas leases, making the cross-lease netting provisions at 218.42 no longer applicable for these leases. The MMS is developing regulations _[MRM1] to amend 218.42 to limit its applicability to payments made under Indian tribal leases and Federal leases for minerals other than oil and gas. The MMS estimates that in about seven cases per year, lessees must comply with the provisions of 218.42(b) and (c) for Indian tribal leases or Federal leases other than oil and gas, demonstrating that cross-lease netting is correct by submitting production reports, pipeline allocation reports, or other similar documentary evidence. This information is necessary for MMS to determine the correct amount of interest owed by the lessee and to ensure proper value is collected.

Tribal Permission for Recoupment on Indian Leases

In order to report cross-lease netting on Indian leases, lessees must also comply with regulations at 218.53(b), allowing only lessees with written permission from the tribe to recoup overpayments on one lease against a different lease for which the tribe is the lessor. The payor must furnish MMS with a copy of the tribe's written permission. Generally, a payor may recoup an overpayment against the current month's royalties or other revenues owed on the same tribal lease. For any month, a payor may not recoup more than 50 percent of the royalties or other revenues owed in that month, under an individual allotted lease, or more than 100 percent of the royalties or other revenues owed in that month, under a tribal lease. Lessees use Form MMS-2014, Report of Sales and Royalty Remittance (burden hours covered under ICR 1010-0140, which expires November 30, 2009), for oil and gas lease recoupments. The MMS requires tribal permission to ensure tribes_[MRM2] receive correct revenues from production on their leases.

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: On occasion.

Estimated Number and Description of Respondents: 1,612 Federal and Indian lessees.

Estimated Annual Reporting and Recordkeeping “Hour” Burden: 1,219 hours.

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:

Respondents' Estimated Annual Burden Hours

Citation 30 CFR part 218	Reporting and recordkeeping requirement	Hour burden	Average number of annual responses	Annual burden hours
Subpart A—General Provisions—Cross-lease netting in calculation of late-payment interest
218.42(b) and (c)	Cross-lease netting in calculation of late-payment interest. (b) Royalties attributed to production from a lease or leases which should have been attributed to production from a different lease or leases may be offset * * * if * * * the payor submits production reports, pipeline allocation reports, or other similar documentary evidence pertaining to the specific production involved which verifies the correct production information * * * (c) If MMS assesses late-payment interest and the payor asserts that some or all of the interest is not owed * * * the burden is on the payor to demonstrate that the exception applies * * *.	2	7	14
Subpart B—Oil and Gas, General—How does a lessee designate a Designee?
218.52(a), (c), and (d)	How does a lessee designate a Designee? (a) If you are a lessee under 30 U.S.C. 1701(7), and you want to designate a person to make all or part of the payments due under a lease on your behalf * * * you must notify MMS * * * in writing of such designation * * * (c) If you want to terminate a designation * * *. you must provide [the following] to MMS in writing * * * (d) MMS may require you to provide notice when there is a change in the percentage of your record title or operating rights ownership. The MMS currently uses Form MMS-4425, Designation Form for Royalty Payment Responsibility, to collect this information.	0.75	1,600	1,200
Subpart B—Oil and Gas, General—Recoupment of overpayments on Indian mineral leases
218.53(b)	Recoupment of overpayments on Indian mineral leases. (b) With written permission authorized by tribal statute or resolution, a payor may recoup an overpayment against royalties or other revenues owed * * * under other leases * * *. A copy of the tribe's written permission must be furnished to MMS * * *	1	5	5
Total burden			1,612	1,219

Estimated Annual Reporting and Recordkeeping “Non-hour Cost” Burden: We have identified no “non-hour cost” burden associated with the collection of information.

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. 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/​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. Before including your address, phone number, e-mail address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public view, we cannot guarantee that we will be able to do so.

MMS Information Collection Clearance Officer: Arlene Bajusz, [phone].

Dated: August 6, 2007.

Lucy Querques Denett,

Associate Director for Minerals Revenue Management.