FOR RELEASE:  September 12, 1995     CONTACT:  Thomas C.  DeRocco
                                                   (202)208-3983
                                               Michael L. Baugher
                                                    (303)231-3162

                      MMS REFORMS ASSESSMENT POLICY
                                    
     The U.S. Department of the Interior's Minerals Management
Service (MMS) announced today, at its Royalty Policy Committee
Meeting in Denver, the first in a series of innovations designed
to streamline the MMS.  The agency announced that effective
October 1, MMS will change how it assesses charges on late and
erroneous royalty and production reports on federal and Indian
lands. 

     Under this new policy, MMS will no longer charge companies
for filing royalty and production reports late and will no longer
charge them for erroneous reports unless their overall monthly
error rate exceeds the average Fiscal Year 1995 level.

     "Companies holding mineral leases on federal and Indian
lands must submit reports and pay royalties for the minerals and
geothermal energy they extract and sell," explained MMS Director
Cynthia Quarterman.  "In order for MMS to distribute royalties
due the states and Indian Tribes and allottees accurately and
timely, the information reported to it must also be accurate and
timely.  Therefore, MMS has historically assessed companies for
the costs associated with correcting inaccurate and untimely
reporting.

     "In 1990, the average error rate for royalty reporting was
5.4 percent with a three percent tolerance before we charged
assessments. For the past year, we have lowered our billing
tolerance to zero and now the error rate is less than three
percent," Quarterman stated.  "Assessments were meant to
encourage timely and accurate reporting, not to punish or
penalize.  We recognize that there are diminishing returns at
some point. If companies can maintain the accuracy of their
reporting at the current level without assessments, we would 
have achieved our goal of having companies report right the first
time. Since companies making late payments are already required
to pay interest, further late payment assessments are
unnecessary." 

     The MMS action will  benefit industry, and will relieve the
federal government of the need to process nearly 1,000 assessment
bills annually and eliminate approximately 35 percent of all MMS
appeals.

     Although assessments on late reporting are being relaxed,
Quarterman cautioned that MMS will continue to impose interest
charges and civil penalties for payments that are late. 


     The Royalty Policy Committee is meeting in Denver to discuss
streamlining and simplifying processes associated with collecting
and disbursing federal and Indian minerals revenues.  As
representatives of groups most affected by mineral revenue
practices, this special caucus of experts will serve an important
role in advising on issues related to management of the Nation's
multi-billion dollar, federal and Indian minerals revenue
program.

     MMS is the federal agency the manages the Nation's natural
gas, oil and other mineral resources on the Outer Continental
Shelf, and collects and disburses about $4 billion yearly in
revenues from mineral leases on federal and Indian land.

                                   -MMS-