[Federal Register: October 19, 2004 (Volume 69, Number 201)]
[Notices]
[Page 61519-61522]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19oc04-85]
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DEPARTMENT OF THE INTERIOR
Minerals Management Service
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).
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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. We changed the title of this information collection request
(ICR) to clarify the regulatory language we are covering under 30 CFR
part 218. The previous title of this ICR was ``30 CFR part 218, subpart
B--Oil and Gas, General.'' The new title of this ICR is ``30 CFR part
218, subpart A--General Provisions, Sec. 218.42 Cross-lease netting in
calculation of late-payment interest; subpart B--Oil and Gas, General,
Sec. 218.52 How does a lessee designate a Designee? (Form MMS-4425,
Designation Form for Royalty Payment Responsibility) and Sec. 218.53
[[Page 61520]]
Recoupment of overpayments on Indian mineral leases; and subpart E--
Solid Minerals--General, Sec. 218.203 Recoupment of overpayments on
Indian mineral leases.''
DATES: Submit written comments on or before December 20, 2004.
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, 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 mrm.comments@mms.gov. 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 (303) 231-3211.
FOR FURTHER INFORMATION CONTACT: Sharron L. Gebhardt, telephone (303)
231-3211, FAX (303) 231-3781, or e-mail Sharron.Gebhardt@mms.gov.
SUPPLEMENTARY INFORMATION: Title: 30 CFR part 218, subpart A--General
Provisions, Sec. 218.42 Cross-lease netting in calculation of late-
payment interest; subpart B--Oil and Gas, General, Sec. 218.52 How
does a lessee designate a Designee? (Form MMS-4425, Designation Form
for Royalty Payment Responsibility) and Sec. 218.53 Recoupment of
overpayments on Indian mineral leases; and subpart E--Solid Minerals--
General, Sec. 218.203 Recoupment of overpayments on Indian mineral
leases.
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 an Indian 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
Indian trust responsibility.
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.
This ICR includes unique reporting circumstances including
designation of designee, cross-lease netting in calculation of late-
payment interest, and tribal permission for recoupment on Indian
leases.
Applicable Public Laws
Applicable citations of the laws pertaining to mineral leases
include Public Law 97-451--Jan. 12, 1983 (Federal Oil and Gas Royalty
Management Act of 1982 [FOGRMA]), Public Law 104-185--Aug. 13, 1996
(Federal Oil and Gas Royalty Simplification and Fairness Act of 1996
[RFSA]) as corrected by Public Law 104-200--Sept. 22, 1996), and the
Indian Mineral Development Act of 1982 (25 U.S.C. 2101 et seq.). Public
laws pertaining to mineral royalties are located on our Web site at
http://www.mrm.mms.gov/Laws_R_D/PublicLawsAMR.htm.
Designation of Designee
The RSFA established that owners of, primarily, operating rights
or, secondarily, lease record title (both referred to as ``lessees'')
are responsible for making royalty and related payments on Federal oil
and gas leases. These RSFA requirements were promulgated in regulations
at 30 CFR 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. The MMS requires this information to ensure
proper mineral revenue collection.
Cross-Lease Netting in Calculation of Late-Payment Interest
Regulations at 30 CFR 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 30 CFR 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
the February 13, 1997, 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 30 CFR 218.42 no longer applicable for these
leases. The MMS is currently developing regulations to amend 30 CFR
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 7 cases per year, lessees must comply with the
provisions of 30 CFR 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 30 CFR 218.53(b) and 218.203(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
[[Page 61521]]
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, for oil and gas lease recoupments (burden
covered under ICR 1010-0140, expires October 31, 2006) and Form MMS-
4430, Solid Mineral Production and Royalty Report, for solid mineral
lease recoupments (burden covered under ICR 1010-0120, expires October
31, 2007). The MMS requires tribal permission to ensure tribes and
individual Indian mineral owners receive correct revenues from
production on their leases.
Frequency: On occasion.
Estimated Number and Description of Respondents: 1,613 Federal and
Indian lessees.
Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 1,220
hours.
The following chart shows the estimated burden hours by CFR section
and paragraph:
Respondents' Estimated Annual Burden Hours
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Average
Reporting and recordkeeping number of Annual burden
Citation 30 CFR 218 requirement Hour burden annual hours
responses
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Subpart A--General Provisions--Cross-lease netting in calculation of late-payment interest.
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218.42(b) and (c) Cross-lease netting in calculation 2 7 4
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
assessed is not owed * * * the
burden is on the payor to
demonstrate that the exception
applies * * *.
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Subpart B--Oil and Gas, General--How does a lessee designate a Designee?
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218.52 (a), (c), and (d) How does a lessee designate (a) If 0.75 1,600 1,200
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.
Note:The MMS currently uses Form .............. .............. ..............
MMS-4425, Designation Form for
Royalty Payment Responsibility to
collect this information.
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Subpart B--Oil and Gas, General--Recoupment of overpayments on Indian mineral leases.
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218.53(b) Recoupment of overpayments on 1 5 5
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 * * *.
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Subpart E--Solid Minerals--General--Recoupment of overpayments on Indian mineral leases.
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218.203(b) Recoupment of overpayments on 1 1 1
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 in that month under
other leases for which that tribe
is the lessor. A copy of the
tribe's written permission must
be furnished to MMS * * *
[following] instructions * * *.
-----------------
Total Burden .................................. .............. 1,613 1,220
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We are revising this ICR to cover regulations at 30 CFR 218.42 (b)
and (c), Cross-Lease Netting in Calculation of Late-Payment Interest
and 30 CFR 218.203(b), Recoupment of Overpayments on Indian Mineral
Leases. Previously addressed burden hours for 30 CFR 218.57 are
currently covered in ICR 1010-0120 (expires October 31, 2007).
Estimated Annual Reporting and Recordkeeping ``Non-hour Cost''
Burden: We have identified no ``non-hour cost'' burdens.
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. 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
[[Page 61522]]
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. We have not identified
non-hour cost burdens for this information collection. 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/FRNotices/FRInfColl.htm.
We also will 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 (202)
208-7744.
Dated: October 12, 2004.
Cathy J. Hamilton,
Acting Associate Director for Minerals Revenue Management.
[FR Doc. 04-23303 Filed 10-18-04; 8:45 am]