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Agency Information Collection Activities: Proposed Collection, Comment Request

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AGENCY:

Minerals Management Service (MMS), Interior.

ACTION:

Notice of a revision of a currently approved information collection (OMB Control Number 1010-0103).

SUMMARY:

To comply with the Paperwork Reduction Act (PRA) of 1995, 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 information collection request (ICR) is titled “30 CFR Part 202—ROYALTIES, Subpart J—Gas Production From Indian Leases, and Part 206—PRODUCT VALUATION, Subpart B—Start Printed Page 34495Indian Oil, and Subpart E—Indian Gas (Forms MMS-4109, Gas Processing Allowance Summary Report; MMS-4110, Oil Transportation Allowance Report; MMS-4295, Gas Transportation Allowance Report; MMS-4410, Accounting for Comparison [Dual Accounting]; and MMS-4411, Safety Net Report).” The title of this ICR clarifies the regulatory language we are covering under 30 CFR parts 202 and 206, for Indian oil and gas leases, and incorporates relevant portions of six previous ICRs. The six ICRs now consolidated into this ICR were previously titled:

  • 1010-0061: 30 CFR Part 206, Subpart B—Indian Oil, § 206.55—Determination of Transportation Allowances (Form MMS-4110, Oil Transportation Allowance Report);
  • 1010-0075: 30 CFR Part 206, Subpart E—Indian Gas, § 206.178—How do I determine a transportation allowance? (Form MMS-4295, Gas Transportation Allowance Report), and § 206.180—How do I determine an actual processing allowance? (Form MMS-4109, Gas Processing Allowance Summary Report);
  • 1010-0095: 30 CFR Part 206—Product Valuation, Subpart B—Indian Oil, § 206.54; Subpart C—Federal Oil, § 206.109; Subpart D—Federal Gas, §§ 206.156 and 206.158; and Subpart E—Indian Gas, § 206.177 (Form MMS-4393, Request to Exceed Regulatory Allowance Limitation). Only Indian oil and gas citations and burden hours are covered in this ICR. Form MMS-4393 is also used for Federal oil and gas citations and is retained with ICR 1010-0136 (expires May 31, 2006), where most of the burden hours are incurred;
  • 1010-0103: 30 CFR Part 206, Subpart E—Indian Gas (Form MMS-4411, Safety Net Report);
  • 1010-0104: 30 CFR Part 206, Subpart E—Indian Gas, §§ 206.172, 206.173, and 206.176 (Form MMS-4410, Accounting for Comparison [Dual Accounting]); and
  • 1010-0138: 30 CFR Part 206, Subpart B, Establishing Oil Value on Royalty Due on Indian Leases.

DATES:

Submit written comments on or before August 15, 2005.

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.

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FOR FURTHER INFORMATION CONTACT:

Sharron L. Gebhardt, telephone (303) 231-3211, FAX (303) 231-3781, or e-mail sharron.gebhardt@mms.gov.

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SUPPLEMENTARY INFORMATION:

Title:30 CFR Part 202—ROYALTIES, Subpart J—Gas Production From Indian Leases, and Part 206—PRODUCT VALUATION, Subpart B—Indian Oil, and Subpart E—Indian Gas (Forms MMS-4109, Gas Processing Allowance Summary Report; MMS-4110, Oil Transportation Allowance Report; MMS-4295, Gas Transportation Allowance Report; MMS-4410, Accounting for Comparison [Dual Accounting]; and MMS-4411, Safety Net Report).”

OMB Control Number: 1010-0103.

Bureau Form Number: Forms MMS-4109, MMS-4110, MMS-4295, MMS-4410, and MMS-4411.

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.

Applicable Citations

Applicable citations of the laws pertaining to mineral leases on Indian lands include 25 U.S.C. 396d (Chapter 12—Lease, Sale or Surrender of Allotted or Unallotted Lands); 25 U.S.C. 2103 (Indian Mineral Development Act of 1982); and Public Law 97-451—Jan. 12, 1983 (Federal Oil and Gas Royalty Management Act of 1982 [FOGRMA]). The CFR citations we are covering in this ICR are 30 CFR part 202, subpart J; and part 206, subparts B and E.

Background

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 MMS collects includes data necessary to ensure that the royalties are paid appropriately.

Regulations at 30 CFR part 202, subpart J, govern royalties on gas production from Indian leases. Regulations at 30 CFR part 206, subparts B and E, govern the valuation of oil and gas produced from leases on Indian lands. Indian tribes and individual Indian mineral owners receive all royalties generated from their lands. Determining product valuation is essential to ensure that Indian tribes and individual Indian mineral owners receive payment on the full value of the minerals removed from their lands. Tribal representatives have expressed their concern that the Secretary continue to fulfill all trust and fiduciary duties and ensure that the correct royalty is received from Indian lands. Failure to collect the data described in this information collection could result in the undervaluation of leased minerals on Indian lands.

Indian Oil

Regulations at 30 CFR part 206, subpart B, govern the valuation for royalty purposes of oil produced from Indian oil and gas leases (tribal and allotted) and must be consistent with mineral leasing laws, other applicable laws, and lease terms.

Regulations at 30 CFR 206.52 explain how lessees must determine the value of oil produced from Indian oil and gas leases. Generally, the regulations provide that lessees determine the value of oil, based upon the gross proceeds under an arm's-length contract, a series of benchmarks under a non-arm's-length contract, and major portion analysis. These oil valuation methods are eligible for applicable transportation allowances.

Transportation Allowances

Under certain circumstances, the regulations authorize lessees to deduct from royalty payments the reasonable Start Printed Page 34496actual costs of transporting the royalty portion of produced minerals from the lease to a sales point not in the immediate lease area. The MMS verifies transportation allowances during the product valuation verification to determine if the lessee reported and paid the proper royalty amount.

The MMS and tribal personnel use the information collected on Form MMS-4110, Oil Transportation Allowance Report, to evaluate whether the transportation allowances reported and claimed by lessees are within regulatory allowance limitations. The regulations establish a limit on transportation allowance deductions for oil at 50 percent of the value of the oil at the point of sale. To receive a transportation deduction, lessees must submit Form MMS-4110 before or in the same month that they report the transportation allowance on Form MMS-2014, Report of Sales and Royalty Remittance (OMB Control Number 1010-0140, expiration date October 31, 2006). After the initial reporting period and for succeeding reporting periods, lessees must submit page one of Form MMS-4110 (and Schedule 1) within 3 months after the end of the calendar year, or after the applicable contract or rate terminates or is modified or amended, whichever is earlier, unless MMS approves a longer period.

Request To Exceed Regulatory Allowance Limitations for Oil Transportation

The MMS may approve an oil transportation allowance in excess of 50 percent upon proper application from the lessee. To request permission to exceed a regulatory allowance limit, lessees must submit a letter to MMS explaining why a higher allowance limit is necessary and provide supporting documentation, including a completed Form MMS-4393, Request to Exceed Regulatory Allowance Limitation. This form provides MMS with the data necessary to make a decision whether to approve or deny the request and track deductions on royalty reports. Data reported on the form is also subject to subsequent audit and adjustment.

Indian Gas

Regulations at 30 CFR part 206, subpart E, govern the valuation for royalty purposes of natural gas produced from Indian oil and gas leases. The regulations apply to all gas production from Indian oil and gas leases (tribal and allotted), except leases on the Osage Indian Reservation.

Safety Net Reporting

The safety net calculation establishes the minimum value, for royalty purposes, of natural gas production from Indian oil and gas leases. This reporting requirement ensures that Indian lessors receive all royalties due and aids MMS compliance efforts.

The regulations require lessees to submit Form MMS-4411, Safety Net Report, when gas production from an Indian oil or gas lease is sold beyond the first index pricing point. The lessee submits safety net prices, for the previous calendar year, to MMS annually (by June 30) using this form.

Dual Accounting

Most Indian leases contain the requirement to perform accounting for comparison (dual accounting) for gas produced from the lease. Lessees must elect to perform actual dual accounting as defined in 30 CFR 206.176 or alternative dual accounting as defined in 30 CFR 206.173.

According to 30 CFR 206.176, dual accounting is defined as the greater of the following two values:

(1) The value of gas prior to processing, less any applicable allowances, or

(2) The combined value of residue gas and gas plant products resulting from processing the gas, less any applicable allowances, plus any drip condensate associated with the processed gas recovered downstream of the point of royalty settlement, without resorting to processing, less applicable allowances.

Lessees use Form MMS-4410, Accounting for Comparison [Dual Accounting], to certify that dual accounting is not required on an Indian lease or to make an election for actual or alternative dual accounting for Indian leases.

Form MMS-4410 (Part A), Certification for Not Performing Dual Accounting, requires lessees to identify the MMS-designated areas where the leases are located and provide specific justification for not performing dual accounting. Part A is a one-time notification, until any changes occur in gas disposition. Part A lists the following acceptable reasons for not performing dual accounting: (1) The lease terms do not require dual accounting; (2) none of the gas from the lease is ever processed; (3) gas has a Btu content of 1000 Btu's per cubic foot or less at lease's facility measurement point(s); (4) none of the gas from the lease is processed until after gas flows into a pipeline with an index located in an index zone; and (5) none of the gas from the lease is processed until after gas flows into a mainline pipeline not located in an index zone.

Form MMS-4410 (Part B), Election to Perform Actual Dual Accounting or Alternative Dual Accounting, allows MMS to collect the lessee's elections to perform actual dual accounting or alternative dual accounting. A lessee makes an election by checking either the actual or alternative dual accounting box for each MMS-designated area where its leases are located. Part B also includes the lessee's lease prefixes within each MMS-designated area to assist lessees in making the appropriate election. The election to perform actual or alternative dual accounting applies to all of a lessee's Indian leases in each MMS-designated area. The first election to use the alternative dual accounting is effective from the time of election through the end of the following calendar year. Thereafter, each election to use the alternative dual accounting methodology must remain in effect for 2 calendar years. However, lessees may return to the actual dual accounting methodology only at the beginning of the next election period or with written approval from MMS and the tribal lessors for tribal leases, and from MMS for Indian allotted leases in the MMS-designated area (30 CFR 206.173(a)).

Transportation Allowances

Under certain circumstances, lessees are authorized to deduct from royalty payments the reasonable actual costs of transporting the royalty portion of produced minerals from the lease to a processing or sales point not in the immediate lease area. Transportation allowances are part of the product valuation process MMS uses to determine if the lessee is reporting and paying the proper royalty amount.

The MMS and tribal personnel use the information collected on Form MMS-4295, Gas Transportation Allowance Report, to evaluate whether the non-arm's-length or no contract transportation allowances reported and claimed by lessees are reasonable, actual costs and are within regulatory allowance limitations. To take a non-arm's-length transportation deduction, a lessee must submit Form MMS-4295 within 3 months after the end of the 12-month period to which the allowance applies. The regulations establish a limit on transportation allowance deductions for gas at 50 percent of the value of the gas at the point of sale.

Request To Exceed Regulatory Allowance Limitation for Gas Transportation

The MMS may approve a gas transportation allowance in excess of 50 Start Printed Page 34497percent upon proper application from the lessee. To request permission to exceed a regulatory allowance limit, lessees must submit a letter to MMS explaining why a higher allowance limit is necessary and provide supporting documentation, including a completed Form MMS-4393, Request to Exceed Regulatory Allowance Limitation. This form provides MMS with the data necessary to make a decision whether to approve or deny the request and track deductions on royalty reports. Data reported on the form is also subject to subsequent audit and adjustment.

Processing Allowances

When gas is processed for the recovery of gas plant products, lessees may claim a processing allowance. The MMS normally accepts the cost as stated in the lessee's arm's-length processing contract as being representative of the cost of the processing allowance. In those instances where gas is being processed through a lessee-owned plant, the lessee must base processing costs on the actual plant operating and maintenance expenses, depreciation, and a reasonable return on investment. The allowance is expressed as a cost per unit of individual gas plant products. Lessees may take processing allowances as a deduction from royalty payments.

The MMS and tribal personnel use the information collected on Form MMS-4109, Gas Processing Allowance Summary Report, to evaluate whether the non-arm's-length or no contract processing allowances reported and claimed by lessees are reasonable, actual costs and are within regulatory allowance limitations. To take a non-arm's-length processing deduction, lessees must submit Form MMS-4109 within 3 months after the end of the 12-month period to which the allowance applies. The regulations establish a limit of 66 2/3 percent of the value of each gas plant product as an allowable gas processing deduction.

Summary

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 to Indian tribes and individual Indian mineral owners.

Proprietary information submitted to MMS under this collection is protected, and no items of a sensitive nature are collected.

In some cases the requirement to respond is mandatory, such as reporting royalty values or declaring the type of dual accounting election the lessee chooses to perform. In other cases, it is voluntary, such as asking permission to exceed a transportation allowance limit. For example, a lessee can request, but is not required to apply for, a transportation allowance deduction in excess of the regulatory limits. However, if no request is made, the transportation limitation is set by regulation.

Frequency of Response: Annually, monthly, and on occasion.

Estimated Number and Description of Respondents: 125 Indian lessees/lessors.

Estimated Annual Reporting and Recordkeeping “Hour” Burden: 1,285 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

30 CFRReporting and recordkeeping requirements1Hour burdenAverage number of annual responsesAnnual burden hours
202—ROYALTIES
Subpart J.—Gas Production From Indian Leases
202.551(c)How do I determine the volume of production for which I must pay royalty if my lease is not in an approved Federal unit or communitization agreement (AFA)? * * *111
206—PRODUCT VALUATION
Subpart B—Indian Oil
206.52(b)(1)(i) and (iii), (b)(2), and (d)Valuation standards (b)(1)(i) * * * The lessee shall have the burden of demonstrating that its contract is arm's-length. * * * (iii) * * * When MMS determines that the value may be unreasonable, MMS will notify the lessee and give the lessee an opportunity to provide written information justifying the lessee's value. * * * (b)(2) MMS may require a lessee to certify that its arm's-length contract provisions include all of the consideration to be paid by the buyer, either directly or indirectly, for the oil.PRODUCE RECORDS The Office of Regulatory Affairs (ORA) determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
(d) Any Indian lessee will make available, upon request to the authorized MMS or Indian representatives, to the Office of the Inspector General of the Department of the Interior, or other persons authorized to receive such information, arm's-length sales and volume data for like-quality production sold, purchased, or otherwise obtained by the lessee from the field or area or from nearby fields or areas.
206.52(e)(2)Valuation standards20120
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(e)(2) A lessee shall notify MMS if it has determined value under paragraph (c)(4) or (c)(5) of this section.* * * The letter shall identify the valuation method to be used and contain a brief description of the procedure to be followed. * * *
206.52(g)Valuation standards40140
(g) The lessee may request a value determination from MMS. * * * The lessee shall submit all available data relevant to its proposal. * * *
206.54(b)(2)Transportation allowances—general4.2514.25
(b)(2) Upon request of a lessee, MMS may approve a transportation allowance deduction in excess of the limitation prescribed by paragraph (b)(1) of this section. * * * An application for exception (using Form MMS-4393, Request to Exceed Regulatory Allowance Limitation) shall contain all relevant and supporting documentation necessary for MMS to make a determination. * * *
206.55(a)(1)(i)Determination of transportation allowances (a) Arm's-length transportation contractsBurden covered under § 206.55(c)(1)(i) and (iii).
(1)(i) * * * Before any deduction may be taken, the lessee must submit a completed page one of Form MMS-4110 (and Schedule 1), Oil Transportation Allowance Report * * *
206.55(a)(2)(i)Determination of transportation allowances (a) Arm's-length transportation contractsBurden covered under § 206.55(a)(3).
(2)(i) * * * Except as provided in this paragraph, no allowance may be taken for the costs of transporting lease production which is not royalty-bearing without MMS approval
206.55(a)(2)(ii)Determination of transportation allowances20120
(a) Arm's-length transportation contracts
(2)(ii) Notwithstanding the requirements of paragraph (i), the lessee may propose to MMS a cost allocation method on the basis of the values of the products transported. * * *
206.55(a)(3)Determination of transportation allowances40140
(a) Arm's-length transportation contracts
(3) If an arm's-length transportation contract includes both gaseous and liquid products, and the transportation costs attributable to each product cannot be determined from the contract, the lessee shall propose an allocation procedure to MMS. * * * The lessee shall submit all available data to support its proposal. * * *
206.55(b)(1)Determination of transportation allowances (b) Non-arm's-length or no contractBurden covered under § 206.55(c)(2)(i), and (c)(2)(iii).
(1) * * * A transportation allowance may be claimed retroactively for a period of not more than 3 months prior to the first day of the month that Form MMS-4110 is filed with MMS, unless MMS approves a longer period upon a showing of good cause by the lessee. * * *
206.55(b)(1)Determination of transportation allowances (b) Non-arm's-length or no contract (1) * * * When necessary or appropriate, MMS may direct a lessee to modify its actual transportation allowance deductionBurden covered under OMB Control Number 1010-0140 (expires 10/31/2006). Burden covered under § 210.52.
206.55(b)(2)(iv)Determination of transportation allowances20120
(b) Non-arm's-length or no contract
(2)(iv) * * * After a lessee has elected to use either method for a transportation system, the lessee may not later elect to change to the other alternative without approval of MMS
206.55(b)(2)(iv)(A)Determination of transportation allowances20120
(b) Non-arm's-length or no contract
(2)(iv)(A) * * * After an election is made, the lessee may not change methods without MMS approval. * * *
206.55(b)(3)(i)Determination of transportation allowances40140
(b) Non-arm's-length or no contract
(3)(i) * * * Except as provided in this paragraph, the lessee may not take an allowance for transporting lease production which is not royalty bearing without MMS approval
206.55(b)(3)(ii)Determination of transportation allowances20120
(b) Non-arm's-length or no contract
(3)(ii) Notwithstanding the requirements of paragraph (i), the lessee may propose to MMS a cost allocation method on the basis of the values of the products transported. * * *
206.55(b)(4)Determination of transportation allowances20120
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(b) Non-arm's-length or no contract
(4) Where both gaseous and liquid products are transported through the same transportation system, the lessee shall propose a cost allocation procedure to MMS. * * * The lessee shall submit all available data to support its proposal. * * *
206.55(b)(5)Determination of transportation allowances20120
(b) Non-arm's-length or no contract
(5) A lessee may apply to MMS for an exception from the requirement that it compute actual costs in accordance with paragraphs (b)(1) through (b)(4) of this section. * * *
206.55(c)(1)(i)Determination of transportation allowances4312
(c) Reporting requirements
(1) Arm's-length contracts. (i) With the exception of those transportation allowances specified in paragraphs (c)(1)(v) and (c)(1)(vi) of this section, the lessee shall submit page one of the initial Form MMS-4110 (and Schedule 1), Oil Transportation Allowance Report, prior to, or at the same time as, the transportation allowance determined under an arm's-length contract, is reported on Form MMS-2014, Report of Sales and Royalty Remittance. * * *
206.558(c)(1)(iii)Determination of transportation4312
(c) Reporting requirements.
(1) Arm's-length contracts. (iii) After the initial reporting period and for succeeding reporting periods, lessees must submit page one of Form MMS-4110 (and Schedule 1) within 3 months after the end of the calendar year, or after the applicable contract or rate terminates or is modified or amended, whichever is earlier, unless MMS approves a longer period (during which period the lessee shall continue to use the allowance from the previous reporting period).
206.55(c)(1)(iv)Determination of transportation allowances (c) Reporting requirements. (1) Arm's-length contracts. (iv) MMS may require that a lessee submit arm's-length transportation contracts, production agreements, operating agreements, and related documents. Documents shall be submitted within a reasonable time, as determined by MMS.PRODUCE RECORDS The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
206.55(c)(2)(i)Determination of transportation allowances6318
(c) Reporting requirements
(2) Non-arm's-length or no contract. (i) With the exception of those transportation allowances specified in paragraphs (c)(2)(v), (c)(2)(vii) and (c)(2)(viii) of this section, the lessee shall submit an initial FormMMS-4100 prior to, or at the same time as, the transportation allowance determined under a non-arm's-length contract or no-contract situationis reported on Form MMS-2014, * * * The initial report may be based upon estimated costs.
206.55(c)(2)(iii)Determination of transportation allowances6318
(c) Reporting requirements
(2) Non-arm's-length or no contract. (iii) For calendar-year reporting periods succeeding the initial reporting period, the lessee shall submit a completed Form MMS-4110 containing the actual costs for the previous reporting period. If oil transportation is continuing, the lessee shall include on Form MMS-4410 its estimated costs for the next calendar year. * * * MMS must receive the Form MMS-4110 within 3 months after the end of the previous reporting period, unless MMS approves a longer period (during which period the lessee shall continue to use the allowance from the previous reporting period).
206.55(c)(2)(iv)Determination of transportation allowances (c) Reporting requirements.Burden covered under § 206.55(c)(2)(i).
(2) Non-arm's-length or no contract. (iv) For new transportation facilities or arrangements, the lessee's initial Form MMS-4100 shall include estimates of the allowable oil transportation costs for the applicable period. * * *
206.55(c)(2)(v)Determination of transportation allowances (c) Reporting requirements.Burden covered under § 206.55(c)(2)(i).
(2) Non-arm's-length or no contract. (v) * * * only those allowances that have been approved by MMS in writing * * *
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206.55(c)(2)(vi)Determination of transportation allowances (c) Reporting requirements. (2) Non-arm's-length or no contract. (vi) Upon request by MMS, the lessee shall submit all data used to prepare its Form MMS-4410. The data shall be provided within a reasonable period of time, as determined by MMSPRODUCE RECORDS The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
206.55(c)(4)(v) and (e)(2)Determination of transportation allowances (c) Reporting requirements. (4) Transportationallowances must be reported as a separate line item on Form MMS-2014 * * *Burden covered under OMB Control Number 1010-0140 (expires 10/31/2006). Burden covered under § 210.52.
(e) Adjustments
(2) For lessees transporting production from Indian leases, the lessee must submit a corrected Form MMS-2014 to reflect actual costs * * *
206-PRODUCT VALUATION
Subpart E—Indian Gas
206.172(b)(1)(ii)How do I value gas produced from leases in an index zone?425100
(b) Valuing residue gas and gas before processing
(1)(ii) Gas production that you certify on Form MMS-4410, * * * is not processed before it flows into a pipeline with an index but which may be processed later * * *
(Part A of Form MMS-4410)
206.172(e)(6)(i) and (iii)How do I value gas produced from leases in an index zone?32060
(e) Determining the minimum value for royalty purposes of gas sold beyond the first index pricing point
(6)(i) You must report the safety net price for each index zone to MMS on Form MMS-4411, Safety Net Report, no later than June 30 following each calendar year; * * * (iii) MMS may order you to amend your safety net price within one year from the date your Form MMS-4411 is due or is filed, whichever is later. * * *
206.172(b)(1)(ii)How do I value gas produced from leases in an index zone? (e) Determining the minimum value for royalty purposes of gas sold beyond the first index pricing point.Burden covered under OMB Control Number 1010-0140 (expires 10/31/2006). Burden covered under § 210.52.
(6)(ii) You must pay and report on Form MMS-2014 additional royalties due no later than June 30 following each calendar year * * *
206.172(f)(1)(ii), (f)(2), and (f)(3)How do I value gas produced from leases in an index zone?40140
(f) Exlcuding some or all tribal leases from valuation under this section
(1) An Indian tribe may ask MMS to exclude some or all of its leases from valuation under this section * * * (ii) If an Indian tribe requests exclusion from an index zone for less than all of its leases, MMS will approve the request only if the excluded leases may be segregated into one or more groups based on separate fields within the reservation
(2) An Indian tribe may ask MMS to terminate exclusion of its leases from valuation under this section. * * *
(3) The Indian tribe's request to MMS under either paragraph (f)(1) or (2) of this section must be in the form of a tribal resolution. * * *
206.173(a)(1)How do I calculate the alternative methodology for dual accounting?23570
(a) Electing a dual accounting method
(1) * * * You may elect to perform the dual accounting calculation according to either § 206.176(a) (called actual dual accounting), or paragraph (b) of this section (called the alternative methodology for dual accounting)
(Part B of Form MMS-4410)
206.173(a)(1)How do I calculate the alternative methodology for dual accounting?Burden covered under § 206.173(a)(1).
(a) electing a dual accounting method
(2) You must make a separate election to use the alternative methodology for dual accounting for your Indian leases in each MMS-designated area. * * *
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(Part B of Form MMS-4410)
206.174(a)(4)(ii)How do I value gas production when an index-based method cannot be used? (a) Situations in which on index-based method cannot be used.Burden covered under OMB Control Number 1010-0140 (expires 10/31/2006). Burden covered under § 210.52.
(4)(ii) If the major portion value is higher, you must submit an amended Form MMS-2014 to MMS by the due date specified in the written notice from MMS of the major portion value. * * *
206.174(b)(1)(i) and (iii); (b)(2); (d)(2)How do I value gas production when an index-based methods cannot be used? (b) Arm's-length contracts. (1)(i) You have the burden of demonstrating that your contract is arm's-length. * * * (iii) * * * In these circumstances, MMS will notify you and give you an opportunity to provide written information justifying your value. * * *PRODUCE RECORDS The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
(b)(2) MMS may require you to certify that your arm's-length contract provisions include all of the consideration the buyer pays, either directly or indirectly, for the gas, residue gas, or gas plant produce
(d) Supporting data
(2) You must make all such data available upon request to the authorized MMS or Indian representatives, to the Office of the Inspector General of the Department, or other authorized persons. * * *
206.174(f)How do I value gas production when an index-based method cannot be used?40140
(f) Value guidance. You may ask MMS for guidance in determining value. You may propose a valuation methods to MMS. Submit all available data related to your proposal and any additional information MMS deems necessary. * * *
206.175(d)(4)How do I determine quantities and qualities of production for computing royalties?20120
(d)(4) You may request MMS approval of other methods for determining the quality of residue gas and gas plant products allocable to each lease. * * *
206.176(b)How do I perform accounting for comparison? (b) If you are required to account for comparison, you may elect to use the alternative dual accounting methodology provided for in § 206.173 instead of the provision in paragraph (a) of this section.Burden covered under § 206.173.(a)(1).
(Part B of Form MMS-4410)
206.176(c)How do I perform accounting for comparison? (c) * * * If you do not perform dual accounting, you must certify to MMS that gas follows into such a pipeline before it is processed.Burden covered under § 206.172(b)(1)(ii).
(Part A of Form MMS—4410)
Transportation Allowances
206.177(c)(2) and (c)(3)What general requirements regarding transportation allowances apply to me?4.2514.25
(c)(2) If you ask MMS, MMS may approve a transportation allowance deduction in excess of the limitation in paragraph (c)(1) of this section. * * *
(3) Your application for exception (using Form MMS-4393, Request to Exceed Regulatory Allowance Limitation) must contain all relevant and supporting documentation necessary for MMS to make a determination4.2514.25
206.178(a)(1)(i)How do I determine a transportation allowance?15050
(a) Determining a transportation allowance under an arm's-length contract
(1)(i) * * * You are required to submit to MMS a coy of your arm's-length transportation contract(s) and all subsequent amendments to the contract(s) within 2 months of the date MMS receives your report which claims the allowance on Form MMS-2014
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206.178(a)(1)(iii)How do I determine a transportation allowance? (a) Determining a transportation allowance under an arm's-length contract (1)(iii) If MMS determines that the consideration paid under an arm's-length transportation contract does not reflect the value of the transportation because of misconduct by or between the contracting parties * * *. In these circumstances, MMS will notify you and give you an opportunity to provide written information justifying your transportation costs.PRODUCE RECORDS The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
206.178(a)(2)(i) and (ii)How do I determine a transportation allowance?20120
(a) Determining a transportation allowance under an arm's-length contract
(2)(i) * * * you cannot take an allowance for the costs of transporting lease production that is not royalty bearing without MMS approval, or without lessor approval on tribal leases
(ii) As an alternative to paragraph (a)(2)(i), you may propose to MMS a cost allocation method based on the values of the products transported.* * *
206.178(a)(3)(i) and (ii)How do I determine a transportation allowance?40140
(a) Determining a transportation allowance under an arm's-length contract
(3)(i) If your arm's-length transportation contract includes both gaseous and liquid products and the transportation costs attributable to each cannot be determined from the contract, you must propose an allocation procedure to MMS. * * *
(ii) You are required to submit all relevant data to support your allocation proposal. * * *
206.178(b)(1)(ii)How do I determine a transportation allowance?157105
(b) Determining a transportation allowance under a non-arm's-length contract or no contract
(1)(ii) * * * You must submit the actual cost information to support the allowance to MMS on Form MMS-4295, Gas Transportation Allowance Report, within 3 months after the end of the 12-month period to which the allowance applies.* * *
206.178(b)(2)(iv)How do I determine a transportation allowance?20120
(b) Determining a transportation allowance under a non-arm's-length contract or no contract
(2)(iv) You may use either depreciation with a return on undepreciated capital investment or a return on depreciable capital investment. * * * you may not later elect to change to the other alternative without MMS approval
206.178(b)(2)(iv)(A)How do I determine a transportation allowance?20120
(b) Determining a transportation allowance under a non-arm's-length contract or no contract
(2)(iv)(A) * * * Once you make an election, you may not change methods without MMS approval. * * *
206.178(b)(3)(i)How do I determine a transportation allowance?40140
(b) Determining a transportation allowance under a non-arm's-length contract or no contract
(3)(i) * * * Except as provided in this paragraph, you may not take an allowance for transporting a product that is not royalty bearing without MMS approval
206.178(b)(3)(ii)How do I determine a transportation allowance?20120
(b) Determining a transportation allowance under a non-arm's-length contract or no contract
(3)(ii) As an alternative to the requirements of paragraph (b)(3)(i) of this section, you may propose to MMS a cost allocation method based on the values of the products transported. * * *
206.178 (b)(5)How do I determine a transportation allowance?40140
(b) Determining a transportation allowance under a non-arm's-length contract or no contract
(5) If you transport both gaseous and liquid products through the same transportation system, you must propose a cost allocation procedure to MMS. * * * You are required to submit all relevant data to support your proposal. * * *
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206.178 (d)(1)How do I determine a transportation allowance? (d) Reporting your transportation allowance. (1) If MMS requests, you must submit all data used to determine your transportation allowance. * * *PRODUCE RECORDS The ORA determined that the audit process is not covered by the PRA because MMS staff asks nonstandard questions to resolve exceptions.
206.178 (d)(2), (e), and (f)(1)How do I determine a transportation allowance? (d) Reporting your allowance. (2) You must report transportation allowances as a separate line item on Form MMS-2014. * * *Burden covered under OMB Control Number 1010-0140 (expires 10/31/2006). Burden covered under § 210.52.
(e) Adjusting incorrect allowances. If for any month the transportation allowance you are entitled to is less than the amount you took on Form MMS-2014, you are required to report and pay additional royalties due, plus interest computed under 30 CFR 218.54 from the first day of the first month you deducted the improper transportation allowance until the date you pay the royalties due. * * *
(f) Determining allowable costs for transportation allowances. * * *
(1) Firm demand charges paid to pipelines. * * * You must modify the Form MMS-2014 by the amount received or credited for the affected reporting period
Processing Allowances
206.180 (a)(1)(i)How do I determine an actual processing allowance?13030
(a) Determining a processing allowance if you have an arm's-length processing contract
(1)(i) * * * You have the burden of demonstrating that your contract is arm's-length. You are required to submit to MMS a copy of your arm's-length contract(s) and all subsequent amendments to the contract(s) within 2 months of the date MMS receives your first report that deducts the allowance on the Form MMS-2014
206.180 (a)(1)(iii)How do I determine an actual processing allowance? (a) Determining a processing allowance if you have an arm's-length processing contract. (1)(iii) If MMS exceptions. determines that the consideration paid under an arm's-length processing contract does not reflect the value of the processing because of misconduct by or between the contracting parties * * *. In these circumstances, MMS will notify you and give you an opportunity to provide written information justifying your processing costs.PRODUCE RECORDS The ORA determined that the audit process is not covered by the PRA because MMS staff asks non-standard questions to resolve exceptions.
206.180 (a)(3)How do I determine an actual processing allowance?40140
(a) Determining a processing allowance if you have an arm's-length processing contract
(3) If your arm's-length processing contract includes more than one gas plant product and the processing costs attributable to each product cannot be determined from the contract, you must propose an allocation procedure to MMS. * * * You are required to submit all relevant data to support your proposal. * * *
206.180 (b)(1)(ii)How do I determine an actual processing allowance?205100
(b) Determining a processing allowance if you have a non-arm's-length contract or no contract
(1)(ii) * * * You must submit the actual cost information to support the allowance to MMS on Form MMS-4109, Gas Processing Allowance Summary Report, within 3 months after the end of the 12-month period for which the allowance applies. * * *
206.180 (b)(2)(iv)How do I determine an actual processing allowance?20120
(b) Determining a processing allowance if you have a non-arm's-length contract or no contract
(2)(iv) You may use either depreciation with a return on undepreciable capital investment or a return on depreciable capital investment. * * * you may not later elect to change to the other alternative without MMS approval
206.180 (b)(2)(iv)(A)How do I determine an actual processing allowance?20120
(b) Determining a processing allowance if you have a non-arm's-length contract or no contract
Start Printed Page 34504
(2)(iv)(A) * * * Once you make an election, you may not change methods without MMS approval. * * *
206.180 (b)(3)How do I determine an actual processing allowance?20120
(b) Determining a processing allowance if you have a non-arm's-length contract or no contract
(3) Your processing allowance under this paragraph (b) must be determined based upon a calendar year or other period if you and MMS agree to an alternative
206.180 (c)(1)How do I determine an actual processing allowance? (c) Reporting your processing allowance. (1) If MMS requests, you must submit all data used to determine your processing allowance. * * *PRODUCE RECORDS The ORA determined that the audit process is not covered by the PRA because MMS staff asks nonstandard questions to resolve exceptions.
206.180 (c)(2) and (d)How do I determine an actual processing allowance? (c) Reporting your processing allowance. (2) You must report gas processing allowances as a separate line item on the Form MMS-2014. * * *Burden covered under OMB Control Number 1010-0140 (expires 10/31/2006). Burden covered under § 210.52.
(d) Adjusting incorrect processing allowances. If for any month the gas processing allowance you are entitled to is less than the amount you took on Form MMS-2014, you are required to pay additional royalties, plus interest computed under 30 CFR 218.54 from the first day of the first month you deducted a processing allowance until the date you pay the royalties due. * * *
206.181(c)How do I establish processing costs for dual accounting purposes when I do not process the gas?40140
(c) A proposed comparable processing fee submitted to either the tribe and MMS (for tribal leases) or MMS (for allotted leases) with your supporting documentation submitted to MMS. If MMS does not take action on your proposal within 120 days, the proposal will be deemed to be denied and subject to appeal to the MMS Director under 30 CFR part 290.
Total Burden2122 1,285
1 Recordkeeping burden hours for §§ 206.52(e)(1) and 206.174(d) will be covered under ICR 1010-0140 (expires October 31, 2006) because they apply to Form MMS-2014, Report of Sales and Royalty Remittance.
2 Total estimated annual burden hours = 1,284.50, which we rounded up to 1,285.

Estimated Annual Reporting and Recordkeeping “Non-hour Cost” Burden: We have identified no “non-hour” cost burdens.

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. 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 Start Printed Page 34505addresses 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.

Start Signature

Dated: May 9, 2005.

Lucy Querques Denett,

Associate Director for Minerals Revenue Management.

End Signature End Supplemental Information

[FR Doc. 05-11682 Filed 6-13-05; 8:45 am]

BILLING CODE 4310-MR-P