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Establishing Oil Value for Royalty Due on Indian Leases

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Information about this document as published in the Federal Register.

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Minerals Management Service (MMS), Interior.


Notice; request for comments.


To comply with the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq.), we are notifying you that a second information collection request (ICR) associated with a supplementary proposed rulemaking was forwarded to the Office of Management and Budget (OMB) for review and approval. We are now soliciting your comments on this second ICR, its expected costs and burdens, and how the data will be collected.

We published the supplementary proposed rulemaking, Establishing Oil Value for Royalty Due on Indian Leases, in the Federal Register on January 5, 2000 (65 FR 403). The first ICR, associated with this same rulemaking, was submitted to OMB on December 27, 1999, and is titled Indian Crude Oil Valuation Report, Form MMS-4416, OMB Control Number 1010-0113.

The PRA 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.


Written comments should be received on or before March 20, 2000.


You must submit comments directly to the Office of Information and Regulatory Affairs, OMB, Attention: Desk Officer for the Interior Department (OMB Control Number 1010-NEW), 725 17th Street, NW, Washington, DC 20503. You should also send copies of these comments to us.

Our mailing address for written comments regarding this information collection is David S. Guzy, Chief, Rules and Publications Staff, Minerals Management Service, Royalty Management Program, P.O. Box 25165, MS 3021, Denver, CO 80225. Courier or overnight delivery address is Building 85, Room A-613, Denver Federal Center, Denver, CO 80225. Email address is

Public Comment Procedure: Your comments and copies of your comments may be submitted to the addresses listed above. Please submit Internet comments as an ASCII file avoiding the use of special characters and any form of encryption. Please also include Attn: Supplementary Proposed Rulemaking—Establishing Oil Value for Royalty Due on Indian Leases, OMB Control Number 1010-NEW, and your name and return address in your Internet message. If you do not receive a confirmation from the system that we have received your Internet message, please contact David S. Guzy directly at (303) 231-3432.

We will post public comments after the comment period closes on the Internet at You may arrange to view paper copies of the comments by contacting David S. Guzy, Chief, Rules and Publications Staff, telephone (303) 231-3432, FAX (303) 231-3385. Our practice is to make comments, including names and addresses of respondents, available for public review on the Internet and during regular business hours at our offices in Lakewood, Colorado. Individual respondents may request that we withhold their home address from the rulemaking record, which we will honor to the extent 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 wish us to withhold your name and/or address, you must state this 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.

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Dennis C. Jones, Rules and Publications Staff, phone (303) 231-3046, FAX (303) 231-3385, email

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Title: Supplementary Proposed Rulemaking—Start Printed Page 8443Establishing Oil Value for Royalty Due on Indian Leases.

OMB Control Number: 1010-NEW.

Abstract: The Secretary of the Interior is responsible for collecting royalties from leases producing minerals from leased Federal and Indian lands. The Secretary is required by various laws to manage the production of mineral resources on Indian lands and Federal onshore and offshore leases, to collect the royalties due, and to distribute the funds in accordance with those laws; we perform these royalty management functions for the Secretary.

Two additional information collection requirements have been identified in the supplementary proposed rule published on January 5, 2000 (65 FR 403) as follows:

  • Section 206.52 explains how Indian lessees must determine the value of oil produced from Indian leases. For royalty purposes, the value of oil produced from leases subject to 30 CFR part 206 Subpart B—Indian Oil is the value calculated under this section with applicable adjustments determined under this subpart. The lessee must report the higher of either their gross proceeds from an arm's-length transaction, or an applicable adjusted spot price. The lessee may be required to revise its initial report and remit additional consideration if the MMS-calculated major portion price is above the initially reported value.
  • Section 206.61(c)(3) states that if an MMS-calculated differential under paragraph (c)(1)(ii) of this section does not apply to an Indian lessee's oil, either due to location or quality differences, the Indian lessee must file a written request for MMS to calculate an Indian lessee-specific differential. This request must demonstrate why the published differential does not adequately address an Indian lessee's specific circumstances.

Another information collection requirement was also identified in the proposed rule published on February 12, 1998 (63 FR 7089) as follows:

  • Section 206.54 allows lessees to ask MMS for valuation guidance. The lessee may develop and propose a value method to MMS. The lessee would submit all available data related to their proposal and any additional information MMS deems necessary. MMS would promptly review the proposal and provide the requested guidance.

We will review and carefully consider any comments received specific to these additional information collection requirements, including any comments received from a public meeting which was held on February 8, 2000, in Denver, Colorado. We will summarize and address all comments in the final rule.

Respondents/Affected Entities: Companies that pay royalties on oil produced from tribal and allotted Indian leases.

Frequency of Response: Annually and monthly.

Estimated Number of Respondents: 225.

Estimated Annual Reporting and Recordkeeping Burden: 6,680 hours.

Estimated Annual Reporting and Recordkeeping Non-Hour Cost Burden: We have identified no cost burdens for this collection over those included in the hour burden.

Comments: Section 3506(c)(2)(A) of the Paperwork Reduction Act 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.

Send your comments directly 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 March 20, 2000.

MMS Information Collection Clearance Officer: Jo Ann Lauterbach (202) 208-7744.

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Dated: February 14, 2000.

Walt Rosenbusch,

Director for Mineral, Management Service.

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[FR Doc. 00-3888 Filed 2-17-00; 8:45 am]