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Agency Information Collection Activities: Proposed Collection, Comment Request

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Information about this document as published in the Federal Register.

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Minerals Management Service (MMS), Interior.


Notice of an extension of a currently approved information collection (OMB Control Number 1010-0107).


To comply with the Paperwork Reduction Act of 1995 (PRA), we are notifying the public that we have submitted to the Office of Management and Budget (OMB) an information collection request (ICR) to renew approval of the paperwork requirements in the regulations under 30 part CFR 218, regarding (1) Cross-lease netting in calculation of late-payment interest; (2) designating a designee; and (3) recoupment of overpayments on Indian oil and gas leases. This notice also provides the public a second opportunity to comment on the paperwork burden of the regulatory requirements. We shortened the title of this ICR to meet OMB requirements. The new title of this Start Printed Page 32598information collection request (ICR) is “30 CFR Part 218, Collection of Monies Due the Federal Government.” The form associated with this collection is Form MMS-4425, Designation Form for Royalty Payment Responsibility.


Submit written comments on or before July 9, 2008.


Submit written comments by either FAX (202) 395-6566 or e-mail ( ) directly to the Office of Information and Regulatory Affairs, OMB, Attention: Desk Officer for the Department of the Interior (OMB Control Number 1010-0107).

You also may submit comments by the following methods:

  • Electronically go to In the “Comment or Submission” column, enter “MMS-2008-MRM-0022” to view supporting and related materials for this ICR. Click on “Send a comment or submission” link to submit public comments. Information on using, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site's “User Tips” link. All comments submitted will be posted to the docket.
  • Mail comments to Hyla Hurst, Regulatory Specialist, Minerals Management Service, Minerals Revenue Management, P.O. Box 25165, MS 302B2, Denver, Colorado 80225. Please reference ICR 1010-0107 in your comments.
  • Hand-carry comments or use an overnight courier service. Our courier address is Building 85, Room A-614, Denver Federal Center, West 6th Ave. and Kipling Blvd., Denver, Colorado 80225. Please reference ICR 1010-0107 in your comments.
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Hyla Hurst, telephone (303) 231-3495, or e-mail You may also contact Hyla Hurst to obtain copies, at no cost, of (1) The ICR, (2) any associated forms, and (3) the regulations that require the subject collection of information.

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Title: 30 CFR Part 218, Collection of Monies Due the Federal Government.

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 mineral resource development on Federal and Indian lands and the Outer Continental Shelf (OCS). The Secretary, under the Mineral Leasing Act (30 U.S.C. 1923), the Indian Mineral Development Act of 1982 (Pub. L. 97-382-Dec. 22, 1982), and the Outer Continental Shelf Lands Act (43 U.S.C. 1353), is responsible for managing the production of minerals from Federal and Indian lands and the OCS, collecting royalties and other mineral revenues from lessees who produce minerals, and distributing the funds collected in accordance with applicable laws. The Secretary has a trust responsibility to manage Indian lands and seek advice and information from Indian beneficiaries. The MMS performs the mineral revenue management functions and assists the Secretary in carrying out the Department's trust responsibility for Indian lands. Public laws pertaining to mineral revenues are on our Web site at​Laws_​R_​D/​PublicLawsAMR.htm.

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 in an amount or value of production from the leased lands. The lessee is required to report various kinds of information to the lessor relative to the disposition of the leased minerals. Such information 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 accurately valued and appropriately paid.

The burden hour and requirements in § 218.203 have been moved to collection 1010-0120, Solid Minerals and Geothermal Collections (expires December 31, 2010) and are therefore removed from this collection. This change enables program-wide review of all information collections for solid minerals and geothermal resources. This ICR covers unique reporting circumstances including (1) Cross-lease netting in calculation of late-payment interest; (2) designation of designee; and (3) tribal permission for recoupment on Indian oil and gas leases.

Cross-Lease Netting in Calculation of Late-Payment Interest

Regulations at § 218.54 require MMS to assess interest on unpaid or underpaid amounts. The MMS distributes these interest revenues to states, Indian tribes, and the U.S. Treasury, based on financial lease distribution information. Current regulations at § 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 February 13, 1997 (6 months after the August 13, 1996, 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 § 218.42 no longer applicable for these leases. The MMS estimates that, in about seven cases per year, lessees must comply with the provisions of § 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.

Designation of Designee

The RSFA established that lessees (owners, primarily, of operating rights, or secondarily, lease record title) are responsible for making royalty and related payments on Federal oil and gas leases. These RSFA requirements are codified at § 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.

Tribal Permission for Recoupment on Indian Oil and Gas Leases

In order to report cross-lease netting on Indian oil and gas leases, lessees must also comply with regulations at § 218.53(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 Start Printed Page 32599other revenues owed in that month, under an individual allotted lease, or 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 (burden hours covered under ICR 1010-0140, expires November 30, 2009), for oil and gas lease recoupments.

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 the duties of the office and may also result in loss of royalty payments. Proprietary information submitted is protected, and there are no questions of a sensitive nature included in this information collection. The requirement to respond is mandatory.

Frequency: On occasion.

Estimated Number and Description of Respondents: 1,612 Federal and Indian lessees.

Estimated Annual Reporting and Recordkeeping “Hour” Burden: 1,219 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

Citation 30 CFR part 218Reporting and recordkeeping requirementHour burdenAverage number of annual responsesAnnual burden hours
Subpart A—General Provisions— Cross-lease netting in calculation of late-payment interest.
218.42(b) and (c)Cross-lease netting in calculation 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 is not owed... the burden is on the payor to demonstrate that the exception applies * * *2714
Subpart B—Oil and Gas, General—How does a lessee designate a Designee?
218.52(a), (c), and (d)How does a lessee designate a Designee? (a) If 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. The MMS currently uses Form MMS-4425, Designation Form for Royalty Payment Responsibility, to collect this information0.751,6001,200
Subpart B—Oil and Gas, General—Recoupment of overpayments on Indian mineral leases.
218.53(b)Recoupment of overpayments on 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 * * *155
Total Burden1,6121,219

Estimated Annual Reporting and Recordkeeping “Non-hour Cost” Burden: We have identified no “non-hour cost” burden associated with the collection of information.

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: Section 3506(c)(2)(A) of the PRA 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, we published a notice in the Federal Register on August 9, 2007 (72 FR 44853), announcing that we would submit this ICR to OMB for Start Printed Page 32600approval. The notice provided the required 60-day comment period. We received no comments in response to the notice.

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. The 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 July 9, 2008.

Public Comment Policy: We will post all comments in response to this notice on our Web site at​Laws_​R_​D/​InfoColl/​InfoColCom.htm. We will also 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. Before including your address, phone number, e-mail address, or other personal identifying information in your comment, be advised that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold from public review your personal identifying information, we cannot guarantee that we will be able to do so.

MMS Information Collection Clearance Officer: Arlene Bajusz (202) 208-7744.

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Dated: May 5, 2008.

Walter D. Cruickshank,

Acting Associate Director for Minerals Revenue Management.

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[FR Doc. E8-12817 Filed 6-6-08; 8:45 am]