03-22973. Agency Information Collection Activities: Submitted for Office of Management and Budget (OMB) Review; Comment Request

AGENCY:

Minerals Management Service (MMS), Interior.

ACTION:

Notice of extension of an information collection (1010-0071).

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 203, “Relief or Reduction in Royalty Rates.” This notice also provides the public a second opportunity to comment on the paperwork burden of these regulatory requirements.

DATE:

Submit written comments by October 10, 2003.

ADDRESSES:

You may submit comments either by 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 (1010-0071). 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.

FOR FURTHER INFORMATION CONTACT:

Arlene Bajusz, Rules Processing Team, [phone]. You may also contact Arlene Bajusz to obtain a copy, at no cost, of the regulations that require the subject collection of information.

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 Pub. L. 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 without 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 is done on a case-by-case basis. By regulation published January 15, 2002, (67 FR 1862) production from leases in the same water depth and area issued after November 28, 2000, also can qualify for royalty suspension in addition to any that may be included in their lease terms.

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. 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.”

The MMS uses 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 impact on 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.

Frequency: On occasion.

Estimated Number and Description of Respondents: Approximately 130 Federal OCS oil and gas lessees.

Estimated Reporting and Recordkeeping “Hour” Burden: The estimated annual “hour” burden for this information collection is a total of 8,550 hours. The following chart details the individual components and estimated hour burdens. In calculating the burdens, we assumed that respondents perform certain requirements in the normal course of their activities. We consider these to be usual and customary and took that into account in estimating the burden.

Reporting or recordkeeping requirement 30 CFR part 203	Average number annual responses	Hour burden	Annual burden hours
	Application Fees
OCS Lands Act Reporting
Application—leases that generate earnings that cannot sustain continued production (end-of-life lease)	1 Application	100	100
	Application 1 × $8,000 = $8,000 *
Application—apart from formal programs for royalty relief for marginal producing lease (expect less than one per year)	1 Application	250	250
	Application 1 × $15,000 = $15,000 *
§ 203.55 Renounce relief arrangement (seldom, if ever used; minimal burden to prepare letter)	1 Letter	1	1
§§ 203.81, 203.83 through 203.89 required reports	Burden included with applications.
OCS Lands Act Reporting Subtotal	3 responses	N/A	351
	Processing Fees = $23,000
DWRAA Reporting
Application—leases in designated areas of GOM deep water acquired in lease sale before 11/28/95 or after 11/28/00 and are producing (deep water expansion project)	1 Application	2,000	2,000
	Application 1 × $19,500 = $19,500
Application—leases in designated areas of deep water GOM, acquired in lease sale before 11/28/95 or after 11/28/00, that have not produced (pre-act or post-2000 deep water leases)	1 Application	2,000	2,000
	Application 1 × $34,000 = $34,000 *
Application—short form to add or assign pre-Act lease	1 Application	40	40
	Application 1 × $1,000 = $1,000
Application—preview assessment (seldom if ever used as applicants generally opt for binding determination by MMS instead)	1 Application	900	900
	Application 1 × $46,600 = $46,600
Application—apart from formal programs for royalty relief for marginal expansion project or marginal non-producing lease (expect less than one per year)	1 Application	1,000	1,000
	Application 1 × $49,000 = $49,000
Redetermination	1 Redetermination	500	500
	Application 1 × $16,000 = $16,000 *
§§ 203.70, 203.81, 203.90, 203.91 Submit fabricator's confirmation report	2 Reports	20	40
§§ 203.70, 203.81, 203.90, 203.92 Submit post-production development report	2 Reports *	50	100
§ 203.77 Renounce relief arrangement (seldom, if ever will be used; minimal burden to prepare letter)	1 Letter	1	1
§ 203.79(a) Request reconsideration of MMS field designation	4 Requests	400	1,600
§ 203.79(c) Request extension of deadline to start construction	1 Request	2	2
§§ 203.81, 203.83 through 203.89 Required reports	Burden included with applications		0
DWRRA Reporting Subtotal	16 Reponses	N/A	8,183
	Processing Fees = $166,100
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 at MMS request	2 Recordkeepers	8	16
Total Annual Burden	21 Responses	N/A	8,550
* CPA certification expense burden also imposed on applicant.

Estimated Reporting and Recordkeeping “Non-Hour Cost” Burden: There are two non-hour costs associated with this information collection. The estimated non-hour cost burden is $414,000 (rounded). This estimate is based on:

(a) Application and audit fees. The total annual estimated cost burden for these fees is $189,000 (refer to burden chart).

(b) Cost of reports prepared by independent certified public accountants. Under § 203.81, a report prepared by an independent certified public accountant (CPA) must accompany the application and post-production report (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. MMS estimates approximately five submissions each year at an average cost of $45,000 per report, for a total estimated annual cost burden of $225,000.

Public Disclosure Statement: The PRA (44 U.S.C. 3501, et seq.) provides that an agency may not conduct or sponsor a collection of information unless it displays a currently valid OMB control number. Until OMB approves a collection of information, you are not obligated to respond.

Comments: Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3501, et seq.) 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, on April 21, 2003, MMS published a Federal Register notice (68 FR 19572) announcing that we would submit this ICR to OMB for approval. The notice provided the required 60-day comment period. In addition, § 203.82 provides the OMB control number for the information collection requirements imposed by the 30 CFR 203 regulations. The regulation also informs the public that they may comment at any time on the collections of information and provides the address to which they should send comments. We have received no comments in response to these efforts.

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. 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 October 10, 2003.

Public Comment Policy: MMS 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 their home address be withheld from the record, which will be honored to the extent allowable by the law. If you wish your name and/or address to be withheld, you must state this prominently at the beginning of your comment. However, anonymous comments will not be considered. MMS 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: Jo Ann Lauterbach, [phone].

Dated: July 9, 2003.

John V. Mirabella,

Acting Chief, Engineering and Operations Division.