Agency Information Collection Activities: Submitted for Office of Management and Budget (OMB) Review; Comment Request, 24738-24748 [E6-6208]
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Federal Register / Vol. 71, No. 80 / Wednesday, April 26, 2006 / Notices
expressly modified or revoked by a
delegation or redelegation of authority
issued hereafter.
Section G. Actions Ratified
The Assistant Secretary hereby ratifies
all actions previously taken by the
Directors and Deputy Directors of CPD
in HUD Field Offices, from September 9,
2003, through the effective date of this
document by the Secretary, with respect
to the programs and matters listed in
Section A and orders of limited denial
of participation issued in accordance
with Section B.
Authority: Section 7(d), Department of
Housing and Urban Development Act, 42
U.S.C. 3535(d).
Dated: March 27, 2006.
Pamela H. Patenaude,
Assistant Secretary for Community Planning
and Development.
[FR Doc. E6–6247 Filed 4–25–06; 8:45 am]
BILLING CODE 4210–67–P
DEPARTMENT OF THE INTERIOR
Minerals Management Service
Agency Information Collection
Activities: Submitted for Office of
Management and Budget (OMB)
Review; Comment Request
Minerals Management Service
(MMS), Interior.
ACTION: Notice of a revision of a
currently approved information
collection (OMB Control Number 1010–
0103).
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AGENCY:
SUMMARY: To comply with the
Paperwork Reduction Act of 1995
(PRA), we are notifying the public that
we have submitted to OMB an
information collection request (ICR) to
renew approval of the paperwork
requirements in the regulations under
30 CFR part 202—Royalties and part
206—Product Valuation. This notice
also provides the public a second
opportunity to comment on the
paperwork burden of these regulatory
requirements. The title of this ICR is ‘‘30
CFR part 202—Royalties, subpart C—
Federal and Indian Oil, and subpart J—
Gas Production From Indian Leases; and
part 206—Product Valuation, subpart
B—Indian Oil, and subpart E—Indian
Gas.’’ The title reflects the previous
consolidation of portions of six ICRs
relating to Indian oil and gas leases. The
six ICRs 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).
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• 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).
Note: ICR 1010–0095 (discontinued May
25, 2005) referenced both Indian and Federal
citations. Indian citations now are referenced
in 1010–0103, and Federal citations are
referenced in 1010–0136; each ICR uses Form
MMS–4393. However, the form resides in
ICR 1010–0136 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]).
• 1010–0138: 30 CFR part 206,
subpart B, Establishing Oil Value on
Royalty Due on Indian Leases.
DATES: Submit written comments on or
before May 26, 2006.
ADDRESSES: Submit written comments
by either FAX (202) 395–6566 or e-mail
(OIRA_Docket@omb.eop.gov) directly to
the Office of Information and Regulatory
Affairs, OMB, Attention: Desk Officer
for the Department of the Interior (OMB
Control Number 1010–0103).
Please also send a copy of your
comments to MMS via e-mail 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.
If you do not receive a confirmation that
we have received your e-mail, contact
Ms. Gebhardt at (303) 231–3211.
You may also mail a copy of your
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
or wish to hand-deliver your comments,
our courier address is Building 85,
Room A–614, Denver Federal Center,
West 6th Ave. and Kipling Blvd.,
Denver, Colorado 80225.
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FOR FURTHER INFORMATION CONTACT:
Sharron L. Gebhardt, telephone (303)
231–3211, FAX (303) 231–3781, e-mail
Sharron.Gebhardt@mms.gov. You may
also contact Sharron Gebhardt to obtain,
at no cost, copies of (1) the ICR, (2) any
associated forms, and (3) regulations
that require the subject collection of
information sent to OMB.
SUPPLEMENTARY INFORMATION:
Title: 30 CFR part 202—Royalties,
subpart C—Federal and Indian Oil, and
subpart J—Gas Production From Indian
Leases; and part 206—Product
Valuation, subpart B—Indian Oil, and
subpart E—Indian Gas.
OMB Control Number: 1010–0103.
Bureau Form Number: Forms MMS–
4109, MMS–4110, MMS–4295, MMS–
4410, and MMS–4411. Form MMS–4393
is used with this ICR (Indian oil and
gas) and also with ICR 1010–0136
(Federal oil and gas) where the form
resides.
Abstract: The Secretary of the U.S.
Department of the Interior under the
Mineral Leasing Act (30 U.S.C. 1923)
and the Outer Continental Shelf Lands
Act (43 U.S.C. 1353) is responsible for
matters relevant to mineral resource
development on Federal and Indian
lands and the Outer Continental Shelf
(OCS) including managing the
production of minerals from Federal
and Indian lands and the OCS,
collecting royalties 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 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. Public
laws pertaining to mineral royalties are
located on our website at https://
www.mrm.mms.gov/Laws_R_D/
PublicLawsAMR.htm.
Background
When a company or an individual
enters into a lease to explore, develop,
produce, and dispose of minerals from
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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 royalties are
accurately valued and appropriately
paid or distributed.
Regulations at 30 CFR part 202,
subparts C and J, and 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.
The data collected and associated
forms are necessary to perform the MMS
regulatory functions and are discussed
in detail below. All data reported is
subject to subsequent audit and
adjustment.
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Indian Oil
Regulations at 30 CFR part 206,
subpart B, which govern the valuation
for royalty purposes of oil produced
from Indian oil and gas leases (tribal
and allotted), must be consistent with
mineral leasing laws, other applicable
laws, and lease terms. Regulations at
§ 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
on: (1) The gross proceeds under an
arm’s-length contract, (2) a series of
benchmarks under a non-arm’s-length
contract, or (3) major portion analysis.
These oil valuation methods are eligible
for applicable transportation
allowances.
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Form MMS–4110, Oil Transportation
Allowance Report
Under certain circumstances, the
regulations authorize lessees to deduct
from royalty payments the reasonable
actual costs of transporting the royalty
portion of produced minerals from the
lease to a sales point not in the
immediate lease area. The regulations
establish a limit on transportation
allowances for oil at 50 percent of the
value of the oil at the point of sale. From
information collected on Form MMS–
4110: (1) MMS verifies transportation
allowances during the product valuation
verification to determine if the lessee
reported and paid the proper royalty
amount; and (2) MMS and tribal
personnel evaluate whether the
transportation allowances reported and
claimed by lessees are within regulatory
allowance limitations. Form MMS–4110
is used for both arm’s-length and nonarm’s-length contracts.
To receive an oil transportation
allowance, 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. Completed Form MMS–4110
and supporting schedules summarize
actual operating, maintenance, and
overhead costs, as well as depreciation
and undepreciated capital investment
costs.
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.
Form MMS–4411, Safety Net Report
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 when gas
production from an Indian oil or gas
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24739
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.
Form MMS–4410, Accounting for
Comparison [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 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 1,000 Btu’s per cubic foot or
less at the 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
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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 MMSdesignated area (30 CFR 206.173(a)).
Form MMS–4295, Gas Transportation
Allowance Report
Under certain circumstances, the
regulations authorize lessees 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. 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. The MMS and tribal
personnel use the information collected
on Form MMS–4295 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 or no contract
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.
Form MMS–4109, Gas Processing
Allowance Summary Report
When gas is processed for the
recovery of gas plant products, lessees
may claim a processing allowance. The
regulations establish a limit of 662⁄3
percent of the value of each gas plant
product as an allowable gas processing
deduction. The MMS normally accepts
the cost as stated in the lessee’s arm’slength 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 to evaluate whether the non-arm’slength 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
or no contract processing deduction,
lessees must submit Form MMS–4109
within 3 months after the end of the 12month period to which the allowance
applies.
Indian Oil and Gas
Form MMS–4393, Request to Exceed
Regulatory Allowance Limitation
Form MMS–4393 is used for both
Federal and Indian leases. Most of the
burden hours are incurred on Federal
leases; therefore, the form and all the
burden hours are approved under ICR
1010–0136. However, we included a
discussion of the form in this ICR as
well.
Upon proper application from the
lessee, MMS may approve an oil or gas
transportation allowance in excess of 50
percent (Federal or Indian) or a gas
processing allowance in excess of 662⁄3
percent (Federal only). 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. 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.
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 and
on occasion.
Estimated Number and Description of
Respondents: 123 Indian lessees.
Estimated Annual Reporting and
Recordkeeping ‘‘Hour’’ Burden: 1,276
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 CFR
Reporting and recordkeeping requirement
Hour burden
Average number of annual
responses
Annual burden
hours
202—ROYALTIES
Subpart C—Federal and Indian Oil
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202.101 .......................
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Standards for reporting and paying royalties .....................................
Oil volumes are to be reported in barrels of clean oil of 42 standard
U.S. gallons (231 cubic inches each) at 60 °F * * *.
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Burden covered under OMB Control Number
1010–0140 (expires 10/31/2006). Burden covered under § 210.52.
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RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued
30 CFR
Reporting and recordkeeping requirement
Hour burden
Average number of annual
responses
Annual burden
hours
Subpart J—Gas Production From Indian Leases
202.551 (b) .................
202.551 (c) ..................
202.558 (a) and (b) .....
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)?.
(b) You and all other persons paying royalties on the lease must report and pay royalties based on your takes * * *.
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)?.
(c) You and all other persons paying royalties on the lease may ask
MMS for permission * * *.
What standards do I use to report and pay royalties on gas? ..........
(a) You must report gas volumes as follows: * * * ...........................
(b) You must report residue gas and gas plant product volumes as
follows: * * *.
Burden covered under OMB Control Number
1010–0140 (expires 10/31/2006). Burden covered under § 210.52.
1
1
1
Burden covered under OMB Control Number
1010–0140 (expires 10/31/2006). Burden covered under § 210.52.
206—PRODUCT VALUATION
Subpart B—Indian Oil
206.52 (b)(1)(i) and
(iii), (b)(2), and (d).
206.52 (e)(1) ...............
206.52 (e)(2) ...............
206.52 (g) ...................
206.54 (b)(2) ...............
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206.55 (a)(1)(i) ............
206.55 (a)(2)(i) ............
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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.
(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.
Valuation standards ............................................................................
(e)(1) Where the value is determined under paragraph (c) of this
section, the lessee shall retain all data relevant to the determination of royalty value * * *.
Valuation standards ............................................................................
(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 * * *.
Valuation standards ............................................................................
(g) The lessee may request a value determination from MMS * * *
The lessee shall submit all available data relevant to its proposal
* * *.
Transportation allowances—general ..................................................
(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 * * *.
Determination of transportation allowances .......................................
(a) Arm’s-length transportation contracts.
(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 * * *.
Determination of transportation allowances .......................................
(a) Arm’s-length transportation contracts.
(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.
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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.
Burden covered under OMB Control Number
1010–0140 (expires 10/31/2006).
20
1
20
40
1
40
Burden covered under OMB Control Number
1010–0136 (expires 05/31/2006).
Burden covered under § 206.55(c)(1)(i) and (iii).
Burden covered under § 206.55(a)(3).
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RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued
30 CFR
Reporting and recordkeeping requirement
Hour burden
Average number of annual
responses
Annual burden
hours
206.55 (a)(2)(ii) ...........
Determination of transportation allowances .......................................
(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 * * *.
Determination of transportation allowances .......................................
(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 * * *.
Determination of transportation allowances .......................................
(b) Non-arm’s-length or no contract.
(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 * * *.
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 deduction..
Determination of transportation allowances .......................................
(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.
Determination of transportation allowances .......................................
(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 * * *.
Determination of transportation allowances .......................................
(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.
Determination of transportation allowances .......................................
(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 * * *.
Determination of transportation allowances .......................................
(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. * * *.
Determination of transportation allowances .......................................
(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 * * *.
Determination of transportation allowances .......................................
(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 * * *.
20
1
20
40
1
40
206.55 (a)(3) ...............
206.55 (b)(1) ...............
206.55 (b)(1) ...............
206.55 (b)(2)(iv) ..........
206.55 (b)(2)(iv)(A) .....
206.55 (b)(3)(i) ............
206.55 (b)(3)(ii) ...........
206.55 (b)(4) ...............
206.55 (b)(5) ...............
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206.55 (c)(1)(i) ............
VerDate Aug<31>2005
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Burden covered under § 206.55(c)(2)(i), and
(c)(2)(iii).
Burden covered under OMB Control Number
1010–0140 (expires 10/31/2006). Burden covered under § 210.52.
20
1
20
20
1
20
40
1
40
20
1
20
20
1
20
20
1
20
4
3
12
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Federal Register / Vol. 71, No. 80 / Wednesday, April 26, 2006 / Notices
RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued
30 CFR
Reporting and recordkeeping requirement
Hour burden
Average number of annual
responses
Annual burden
hours
206.55 (c)(1)(iii) ..........
Determination of transportation allowances .......................................
(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).
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.
Determination of transportation allowances .......................................
(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 Form MMS–4110 prior to, or at
the same time as, the transportation allowance determined under
a non-arm’s-length contract or no-contract situation is reported on
Form MMS–2014 * * * The initial report may be based upon estimated costs.
Determination of transportation allowances .......................................
(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–4110 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).
Determination of transportation allowances .......................................
(c) Reporting requirements.
(2) Non-arm’s-length or no contract.
(iv) For new transportation facilities or arrangements, the lessee’s
initial Form MMS–4110 shall include estimates of the allowable
oil transportation costs for the applicable period * * *.
Determination of transportation allowances .......................................
(c) Reporting requirements.
(2) Non-arm’s-length or no contract.
(v) * * * only those allowances that have been approved by MMS
in writing * * *.
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–4110. The data shall be provided within a
reasonable period of time, as determined by MMS.
4
3
12
206.55 (c)(1)(iv) ..........
206.55 (c)(2)(i) ............
206.55 (c)(2)(iii) ..........
206.55 (c)(2)(iv) ..........
206.55 (c)(2)(v) ...........
206.55(c)(2)(vi) ...........
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206.55 (c)(4) and
(e)(2).
VerDate Aug<31>2005
Determination of transportation allowances .......................................
(c) Reporting requirements.
(4) Transportation allowances must be reported as a separate line
item on Form MMS–2014, * * *.
(e) Adjustments.
(2) For lessees transporting production from Indian leases, the lessee must submit a corrected Form MMS–2014 to reflect actual
costs, * * *.
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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.
6
3
18
6
3
18
Burden covered under § 206.55(c)(2)(i).
Burden covered under § 206.55(c)(2)(i).
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.
Burden covered under OMB Control Number
1010–0140 (expires 10/31/2006). Burden covered under § 210.52.
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Federal Register / Vol. 71, No. 80 / Wednesday, April 26, 2006 / Notices
RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued
30 CFR
Hour burden
Reporting and recordkeeping requirement
Average number of annual
responses
Annual burden
hours
4
25
100
3
20
60
206—PRODUCT VALUATION
Subpart E—Indian Gas
206.172(b)(1)(ii) ..........
206.172(e)(6)(i) and
(iii).
206.172(e)(6)(ii) ..........
206.172(f)(1)(ii), (f)(2),
and (f)(3).
206.173(a)(1) ..............
206.173(a)(2) ..............
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206.174(a)(4)(ii) ..........
VerDate Aug<31>2005
How do I value gas produced from leases in an index zone? ..........
(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 * * *.
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.
(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. * * *.
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.
(6)(ii) You must pay and report on Form MMS–2014 additional royalties due no later than June 30 following each calendar year
* * *.
How do I value gas produced from leases in an index zone? ..........
(f) Excluding 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
* * *.
How do I calculate the alternative methodology for dual accounting?
(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).
How do I calculate the alternative methodology for dual accounting?
(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 MMSdesignated area. * * *.
How do I value gas production when an index-based method cannot be used?
(a) Situations in which an index-based method cannot be used.
(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 * * *.
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Burden covered under OMB Control Number
1010–0140 (expires 10/31/2006). Burden covered under § 210.52.
40
1
40
2
35
70
Burden covered under § 206.173(a)(1).
Burden covered under OMB Control Number
1010–0140 (expires 10/31/2006). Burden covered under § 210.52.
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Federal Register / Vol. 71, No. 80 / Wednesday, April 26, 2006 / Notices
RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued
30 CFR
206.174 (b)(1)(i) and
(iii); (b)(2); (d)(2).
206.174 (d) .................
206.174 (f) ..................
206.175(d)(4) ..............
206.176(b) ...................
206.176(c) ...................
Reporting and recordkeeping requirement
Hour burden
How do I value gas production when an index-based method 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.
* * *.
(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
product.
(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.* * *.
How do I value gas production when an index-based method cannot be used?
(d) Supporting data. If you determine the value of production under
paragraph (c) of this section, you must retain all data relevant to
determination of royalty value.
How do I value gas production when an index-based method cannot be used?
(f) Value guidance. You may ask MMS for guidance in determining
value. You may propose a valuation method to MMS. Submit all
available data related to your proposal and any additional information MMS deems necessary. * * *.
How do I determine quantities and qualities of production for computing royalties?.
(d)(4) You may request MMS approval of other methods for determining the quantity of residue gas and gas plant products allocable to each lease. * * *.
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 provisions in paragraph (a) of this section.
How do I perform accounting for comparison? ..................................
(c) * * * If you do not perform dual accounting, you must certify to
MMS that gas flows into such a pipeline before it is processed.
Average number of annual
responses
Annual burden
hours
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.
Burden covered under OMB Control Number
1010–0140 (expires 10/31/2006).
40
1
40
20
1
20
Burden covered under § 206.173(a)(1).
Burden covered under § 206.172(b)(1)(ii).
TRANSPORTATION ALLOWANCES
206.177(c)(2) and
(c)(3).
206.178 (a)(1)(i) ..........
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206.178(a)(1)(iii) .........
VerDate Aug<31>2005
What general requirements regarding transportation allowances
apply to me?
(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 determination.
How do I determine a transportation allowance? ..............................
(a) Determining a transportation allowance under an arm’s-length
contract.
(1)(i) * * * You are required to submit to MMS a copy 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.
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.
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Burden covered under OMB Control Number
1010–0136 (expires 05/31/2006)
1
50
50
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.
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Federal Register / Vol. 71, No. 80 / Wednesday, April 26, 2006 / Notices
RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued
30 CFR
Reporting and recordkeeping requirement
Hour burden
Average number of annual
responses
Annual burden
hours
206.178(a)(2)(i) and (ii)
How do I determine a transportation allowance? ..............................
(a) Determining a transportation allowance under an arm’s-length
contract.
(2)(i) of this section * * * 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. * * *.
How do I determine a transportation allowance? ..............................
(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. * * *.
How do I determine a transportation allowance? ..............................
(b) Determining a transportation allowance under a non-arm’slength 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. * * *.
How do I determine a transportation allowance? ..............................
(b) Determining a transportation allowance under a non-arm’slength 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.
How do I determine a transportation allowance? ..............................
(b) Determining a transportation allowance under a non-arm’slength contract or no contract.
(2)(iv)(A) * * * Once you make an election, you may not change
methods without MMS approval * * *.
How do I determine a transportation allowance? ..............................
(b) Determining a transportation allowance under a non-arm’slength 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.
How do I determine a transportation allowance? ..............................
(b) Determining a transportation allowance under a non-arm’slength 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 * * *.
How do I determine a transportation allowance? ..............................
(b) Determining a transportation allowance under a non-arm’slength 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 * * *.
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 * * *.
20
1
20
40
1
40
15
7
105
20
1
20
20
1
20
40
1
40
20
1
20
40
1
40
206.178(a)(3)(i) and (ii)
206.178(b)(1)(ii) ..........
206.178(b)(2)(iv) .........
206.178(b)(2)(iv)(A) ....
206.178(b)(3)(i) ...........
206.178(b)(3)(ii) ..........
206.178(b)(5) ..............
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206.178(d)(1) ..............
VerDate Aug<31>2005
16:58 Apr 25, 2006
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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.
E:\FR\FM\26APN1.SGM
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Federal Register / Vol. 71, No. 80 / Wednesday, April 26, 2006 / Notices
RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued
30 CFR
Reporting and recordkeeping requirement
Hour burden
206.178 (d)(2), (e), and
(f)(1).
How do I determine a transportation allowance? ..............................
(d) Reporting your transportation allowance.
(2) You must report transportation allowances as a separate line
item on Form MMS–2014 * * *.
(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.
Average number of annual
responses
Annual burden
hours
Burden covered under OMB Control Number
1010–0140 (expires 10/31/2006). Burden covered under § 210.52.
PROCESSING ALLOWANCES
206.180(a)(1)(i) ...........
206.180(a)(1)(iii) .........
206.180(a)(3) ..............
206.180(b)(1)(ii) ..........
206.180(b)(2)(iv) .........
206.180(b)(2)(iv)(A) ....
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206.180(b)(3) ..............
VerDate Aug<31>2005
How do I determine an actual processing allowance? ......................
(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.
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 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.
How do I determine an actual processing allowance? ......................
(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 * * *.
How do I determine an actual processing allowance? ......................
(b) Determining a processing allowance if you have a non-arm’slength 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 * * *.
How do I determine an actual processing allowance? ......................
(b) Determining a processing allowance if you have a non-arm’slength 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.
How do I determine an actual processing allowance? ......................
(b) Determining a processing allowance if you have a non-arm’slength contract or no contract.
(2)(iv)(A) * * * Once you make an election, you may not change
methods without MMS approval * * *.
How do I determine an actual processing allowance? ......................
(b) Determining a processing allowance if you have a non-arm’slength 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.
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1
30
30
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.
40
1
40
20
5
100
20
1
20
20
1
20
20
1
20
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Federal Register / Vol. 71, No. 80 / Wednesday, April 26, 2006 / Notices
RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued
Annual burden
hours
Reporting and recordkeeping requirement
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 * * *.
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. * * *.
(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 * * *.
How do I establish processing costs for dual accounting purposes
when I do not process the gas?
(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.
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.
Burden covered under OMB Control Number
1010–0140 (expires 10/31/2006). Burden covered under § 210.52.
40
1
40
.............................................................................................................
........................
210
1,276
206.180(c)(2) and (d) ..
206.181(c) ...................
wwhite on PROD1PC61 with NOTICES
Total Burden ........
Estimated Annual Reporting and
Recordkeeping ‘‘Non-hour’’ Cost
Burden: We have identified no ‘‘nonhour’’ 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: 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 June
14, 2005 (70 FR 34494), announcing that
we would submit this ICR to OMB for
approval. The notice provided the
required 60-day comment period. We
VerDate Aug<31>2005
16:58 Apr 25, 2006
Jkt 208001
Hour burden
Average number of annual
responses
30 CFR
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 May 26, 2006.
Public Comment Policy: We will post
all comments in response to this notice
on our Web site at https://
www.mrm.mms.gov/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. 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 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.
PO 00000
Frm 00112
Fmt 4703
Sfmt 4703
MMS Information Collection
Clearance Officer: Arlene Bajusz (202)
208–7744.
Dated: February 15, 2006.
Lucy Querques Denett,
Associate Director for Minerals Revenue
Management.
[FR Doc. E6–6208 Filed 4–25–06; 8:45 am]
BILLING CODE 4310–MR–P
DEPARTMENT OF THE INTERIOR
National Park Service
National Register of Historic Places;
Notification of Pending Nominations
and Related Actions
Nominations for the following
properties being considered for listing
or related actions in the National
Register were received by the National
Park Service before April 8, 2006.
Pursuant to § 60.13 of 36 CFR part 60
written comments concerning the
significance of these properties under
the National Register criteria for
evaluation may be forwarded by United
States Postal Service, to the National
Register of Historic Places, National
Park Service, 1849 C St. NW., 2280,
Washington, DC 20240; by all other
carriers, National Register of Historic
Places, National Park Service, 1201 Eye
St., NW., 8th floor, Washington, DC
20005; or by fax, 202–371–6447. Written
E:\FR\FM\26APN1.SGM
26APN1
]]>Agencies
[Federal Register Volume 71, Number 80 (Wednesday, April 26, 2006)]
[Notices]
[Pages 24738-24748]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-6208]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE INTERIOR
Minerals Management Service
Agency Information Collection Activities: Submitted for Office of
Management and Budget (OMB) Review; Comment Request
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 of 1995 (PRA), we
are notifying the public that we have submitted to OMB an information
collection request (ICR) to renew approval of the paperwork
requirements in the regulations under 30 CFR part 202--Royalties and
part 206--Product Valuation. This notice also provides the public a
second opportunity to comment on the paperwork burden of these
regulatory requirements. The title of this ICR is ``30 CFR part 202--
Royalties, subpart C--Federal and Indian Oil, and subpart J--Gas
Production From Indian Leases; and part 206--Product Valuation, subpart
B--Indian Oil, and subpart E--Indian Gas.'' The title reflects the
previous consolidation of portions of six ICRs relating to Indian oil
and gas leases. The six ICRs were previously titled:
1010-0061: 30 CFR part 206, subpart B--Indian Oil, Sec.
206.55--Determination of Transportation Allowances (Form MMS-4110, Oil
Transportation Allowance Report).
1010-0075: 30 CFR part 206, subpart E--Indian Gas, Sec.
206.178--How do I determine a transportation allowance? (Form MMS-4295,
Gas Transportation Allowance Report), and Sec. 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, Sec. 206.54; subpart C--Federal Oil, Sec. 206.109;
subpart D--Federal Gas, Sec. Sec. 206.156 and 206.158; and Subpart E--
Indian Gas, Sec. 206.177 (Form MMS-4393, Request to Exceed Regulatory
Allowance Limitation).
Note: ICR 1010-0095 (discontinued May 25, 2005) referenced both
Indian and Federal citations. Indian citations now are referenced in
1010-0103, and Federal citations are referenced in 1010-0136; each
ICR uses Form MMS-4393. However, the form resides in ICR 1010-0136
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,
Sec. Sec. 206.172, 206.173, and 206.176 (Form MMS-4410, Accounting for
Comparison [Dual Accounting]).
1010-0138: 30 CFR part 206, subpart B, Establishing Oil
Value on Royalty Due on Indian Leases.
DATES: Submit written comments on or before May 26, 2006.
ADDRESSES: Submit written comments by either FAX (202) 395-6566 or e-
mail (OIRA--Docket@omb.eop.gov) directly to the Office of Information
and Regulatory Affairs, OMB, Attention: Desk Officer for the Department
of the Interior (OMB Control Number 1010-0103).
Please also send a copy of your comments to MMS via e-mail 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. If you do not receive a
confirmation that we have received your e-mail, contact Ms. Gebhardt at
(303) 231-3211.
You may also mail a copy of your 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 or wish to hand-deliver
your comments, our courier address is Building 85, Room A-614, Denver
Federal Center, West 6th Ave. and Kipling Blvd., Denver, Colorado
80225.
FOR FURTHER INFORMATION CONTACT: Sharron L. Gebhardt, telephone (303)
231-3211, FAX (303) 231-3781, e-mail Sharron.Gebhardt@mms.gov. You may
also contact Sharron Gebhardt to obtain, at no cost, copies of (1) the
ICR, (2) any associated forms, and (3) regulations that require the
subject collection of information sent to OMB.
SUPPLEMENTARY INFORMATION:
Title: 30 CFR part 202--Royalties, subpart C--Federal and Indian
Oil, and subpart J--Gas Production From Indian Leases; and part 206--
Product Valuation, subpart B--Indian Oil, and subpart E--Indian Gas.
OMB Control Number: 1010-0103.
Bureau Form Number: Forms MMS-4109, MMS-4110, MMS-4295, MMS-4410,
and MMS-4411. Form MMS-4393 is used with this ICR (Indian oil and gas)
and also with ICR 1010-0136 (Federal oil and gas) where the form
resides.
Abstract: The Secretary of the U.S. Department of the Interior
under the Mineral Leasing Act (30 U.S.C. 1923) and the Outer
Continental Shelf Lands Act (43 U.S.C. 1353) is responsible for matters
relevant to mineral resource development on Federal and Indian lands
and the Outer Continental Shelf (OCS) including managing the production
of minerals from Federal and Indian lands and the OCS, collecting
royalties 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 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. Public laws pertaining to mineral
royalties are located on our website at https://www.mrm.mms.gov/Laws_
R_D/PublicLawsAMR.htm.
Background
When a company or an individual enters into a lease to explore,
develop, produce, and dispose of minerals from
[[Page 24739]]
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 royalties are
accurately valued and appropriately paid or distributed.
Regulations at 30 CFR part 202, subparts C and J, and 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.
The data collected and associated forms are necessary to perform
the MMS regulatory functions and are discussed in detail below. All
data reported is subject to subsequent audit and adjustment.
Indian Oil
Regulations at 30 CFR part 206, subpart B, which govern the
valuation for royalty purposes of oil produced from Indian oil and gas
leases (tribal and allotted), must be consistent with mineral leasing
laws, other applicable laws, and lease terms. Regulations at Sec.
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 on: (1) The gross proceeds
under an arm's-length contract, (2) a series of benchmarks under a non-
arm's-length contract, or (3) major portion analysis. These oil
valuation methods are eligible for applicable transportation
allowances.
Form MMS-4110, Oil Transportation Allowance Report
Under certain circumstances, the regulations authorize lessees to
deduct from royalty payments the reasonable actual costs of
transporting the royalty portion of produced minerals from the lease to
a sales point not in the immediate lease area. The regulations
establish a limit on transportation allowances for oil at 50 percent of
the value of the oil at the point of sale. From information collected
on Form MMS-4110: (1) MMS verifies transportation allowances during the
product valuation verification to determine if the lessee reported and
paid the proper royalty amount; and (2) MMS and tribal personnel
evaluate whether the transportation allowances reported and claimed by
lessees are within regulatory allowance limitations. Form MMS-4110 is
used for both arm's-length and non-arm's-length contracts.
To receive an oil transportation allowance, 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. Completed
Form MMS-4110 and supporting schedules summarize actual operating,
maintenance, and overhead costs, as well as depreciation and
undepreciated capital investment costs.
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.
Form MMS-4411, Safety Net Report
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 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.
Form MMS-4410, Accounting for Comparison [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 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 1,000 Btu's per
cubic foot or less at the 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
[[Page 24740]]
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)).
Form MMS-4295, Gas Transportation Allowance Report
Under certain circumstances, the regulations authorize lessees 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. 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. The
MMS and tribal personnel use the information collected on Form MMS-4295
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 or no contract 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.
Form MMS-4109, Gas Processing Allowance Summary Report
When gas is processed for the recovery of gas plant products,
lessees may claim a processing allowance. The regulations establish a
limit of 66\2/3\ percent of the value of each gas plant product as an
allowable gas processing deduction. 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 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 or no contract processing deduction, lessees must
submit Form MMS-4109 within 3 months after the end of the 12-month
period to which the allowance applies.
Indian Oil and Gas
Form MMS-4393, Request to Exceed Regulatory Allowance Limitation
Form MMS-4393 is used for both Federal and Indian leases. Most of
the burden hours are incurred on Federal leases; therefore, the form
and all the burden hours are approved under ICR 1010-0136. However, we
included a discussion of the form in this ICR as well.
Upon proper application from the lessee, MMS may approve an oil or
gas transportation allowance in excess of 50 percent (Federal or
Indian) or a gas processing allowance in excess of 66\2/3\ percent
(Federal only). 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. 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.
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 and on occasion.
Estimated Number and Description of Respondents: 123 Indian
lessees.
Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 1,276
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
----------------------------------------------------------------------------------------------------------------
Average
Reporting and recordkeeping Hour number of Annual burden
30 CFR requirement burden annual hours
responses
----------------------------------------------------------------------------------------------------------------
202--ROYALTIES
Subpart C--Federal and Indian Oil
----------------------------------------------------------------------------------------------------------------
202.101............................. Standards for reporting and paying Burden covered under OMB Control
royalties. Number 1010-0140 (expires 10/31/
Oil volumes are to be reported in 2006). Burden covered under Sec.
barrels of clean oil of 42 standard 210.52.
U.S. gallons (231 cubic inches each)
at 60 [deg]F * * *.
----------------------------------------------------------------------------------------------------------------
[[Page 24741]]
Subpart J--Gas Production From Indian Leases
----------------------------------------------------------------------------------------------------------------
202.551 (b)......................... How do I determine the volume of Burden covered under OMB Control
production for which I must pay Number 1010-0140 (expires 10/31/
royalty if my lease is not in an 2006). Burden covered under Sec.
approved Federal unit or 210.52.
communitization agreement (AFA)?.
(b) You and all other persons paying
royalties on the lease must report
and pay royalties based on your takes
* * *.
202.551 (c)......................... How do I determine the volume of 1 1 1
production for which I must pay
royalty if my lease is not in an
approved Federal unit or
communitization agreement (AFA)?.
(c) You and all other persons paying
royalties on the lease may ask MMS
for permission * * *.
202.558 (a) and (b)................. What standards do I use to report and Burden covered under OMB Control
pay royalties on gas?. Number 1010-0140 (expires 10/31/
(a) You must report gas volumes as 2006). Burden covered under Sec.
follows: * * *. 210.52.
(b) You must report residue gas and
gas plant product volumes as follows:
* * *.
----------------------------------------------------------------------------------------------------------------
206--PRODUCT VALUATION
Subpart B--Indian Oil
----------------------------------------------------------------------------------------------------------------
206.52 (b)(1)(i) and (iii), (b)(2), Valuation standards................... PRODUCE RECORDS--The Office of
and (d). (b)(1)(i) * * * The lessee shall have Regulatory Affairs (ORA)
the burden of demonstrating that its determined that the audit process
contract is arm's-length * * *. is not covered by the PRA because
(iii) * * * When MMS determines that MMS staff asks non-standard
the value may be unreasonable, MMS questions to resolve exceptions.
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.
(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)(1)....................... Valuation standards................... Burden covered under OMB Control
(e)(1) Where the value is determined Number 1010-0140 (expires 10/31/
under paragraph (c) of this section, 2006).
the lessee shall retain all data
relevant to the determination of
royalty value * * *.
206.52 (e)(2)....................... Valuation standards................... 20 1 20
(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 standards................... 40 1 40
(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--general.... Burden covered under OMB Control
(b)(2) Upon request of a lessee, MMS Number 1010-0136 (expires 05/31/
may approve a transportation 2006).
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 Burden covered under Sec.
allowances. 206.55(c)(1)(i) and (iii).
(a) Arm's-length transportation
contracts..
(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 Burden covered under Sec.
allowances. 206.55(a)(3).
(a) Arm's-length transportation
contracts..
(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.
[[Page 24742]]
206.55 (a)(2)(ii)................... Determination of transportation 20 1 20
allowances.
(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 40 1 40
allowances.
(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 Burden covered under Sec.
allowances. 206.55(c)(2)(i), and (c)(2)(iii).
(b) Non-arm's-length or no contract...
(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 Burden covered under OMB Control
allowances. Number 1010-0140 (expires 10/31/
(b) Non-arm's-length or no contract... 2006). Burden covered under Sec.
(1) * * * When necessary or 210.52.
appropriate, MMS may direct a lessee
to modify its actual transportation
allowance deduction..
206.55 (b)(2)(iv)................... Determination of transportation 20 1 20
allowances.
(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 20 1 20
allowances.
(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 40 1 40
allowances.
(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 20 1 20
allowances.
(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 20 1 20
allowances.
(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 20 1 20
allowances.
(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 4 3 12
allowances.
(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 * * *.
[[Page 24743]]
206.55 (c)(1)(iii).................. Determination of transportation 4 3 12
allowances.
(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 PRODUCE RECORDS--The ORA
allowances. determined that the audit process
(c) Reporting requirements............ is not covered by the PRA because
(1) Arm's-length contracts............ MMS staff asks non-standard
(iv) MMS may require that a lessee questions to resolve exceptions.
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.
206.55 (c)(2)(i).................... Determination of transportation 6 3 18
allowances.
(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 Form
MMS-4110 prior to, or at the same
time as, the transportation allowance
determined under a non-arm's-length
contract or no-contract situation is
reported on Form MMS-2014 * * * The
initial report may be based upon
estimated costs.
206.55 (c)(2)(iii).................. Determination of transportation 6 3 18
allowances.
(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-4110
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............
(2) Non-arm's-length or no contract...
(iv) For new transportation facilities Burden covered under Sec.
or arrangements, the lessee's initial 206.55(c)(2)(i).
Form MMS-4110 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............
(2) Non-arm's-length or no contract...
(v) * * * only those allowances that Burden covered under Sec.
have been approved by MMS in writing 206.55(c)(2)(i).
* * *.
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 PRODUCE RECORDS--The ORA
shall submit all data used to prepare determined that the audit process
its Form MMS-4110. The data shall be is not covered by the PRA because
provided within a reasonable period MMS staff asks non-standard
of time, as determined by MMS. questions to resolve exceptions.
206.55 (c)(4) and (e)(2)............ Determination of transportation Burden covered under OMB Control
allowances. Number 1010-0140 (expires 10/31/
(c) Reporting requirements............ 2006). Burden covered under Sec.
(4) Transportation allowances must be 210.52.
reported as a separate line item on
Form MMS-2014, * * *..
(e) Adjustments.......................
(2) For lessees transporting
production from Indian leases, the
lessee must submit a corrected Form
MMS-2014 to reflect actual costs, * *
*..
----------------------------------------------------------------------------------------------------------------
[[Page 24744]]
206--PRODUCT VALUATION
Subpart E--Indian Gas
----------------------------------------------------------------------------------------------------------------
206.172(b)(1)(ii)................... How do I value gas produced from 4 25 100
leases in an index zone?.
(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 * * *..
206.172(e)(6)(i) and (iii).......... How do I value gas produced from 3 20 60
leases in an index zone?.
(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(e)(6)(ii)................... How do I value gas produced from Burden covered under OMB Control
leases in an index zone?. Number 1010-0140 (expires 10/31/
(e) Determining the minimum value for 2006). Burden covered under Sec.
royalty purposes of gas sold beyond 210.52.
the first index pricing point.
(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 How do I value gas produced from 40 1 40
(f)(3). leases in an index zone?.
(f) Excluding 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 2 35 70
methodology for dual accounting?
(a) Electing a dual accounting method.
(1) * * * You may elect to perform the
dual accounting calculation according
to either Sec. 206.176(a) (called
actual dual accounting), or paragraph
(b) of this section (called the
alternative methodology for dual
accounting).
206.173(a)(2)....................... How do I calculate the alternative Burden covered under Sec.
methodology for dual accounting? 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. *
* *.
206.174(a)(4)(ii)................... How do I value gas production when an Burden covered under OMB Control
index-based method cannot be used? Number 1010-0140 (expires 10/31/
(a) Situations in which an index-based 2006). Burden covered under Sec.
method cannot be used.. 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 * * *.
[[Page 24745]]
206.174 (b)(1)(i) and (iii); (b)(2); How do I value gas production when an PRODUCE RECORDS--The ORA
(d)(2). index-based method cannot be used? determined that the audit process
(b) Arm's-length contracts............ is not covered by the PRA because
(1)(i) You have the burden of MMS staff asks non-standard
demonstrating that your contract is questions to resolve exceptions.
arm's-length.* * *.
(iii) * * * In these circumstances,
MMS will notify you and give you an
opportunity to provide written
information justifying your value. *
* *..
(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 product..
(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 (d)......................... How do I value gas production when an Burden covered under OMB Control
index-based method cannot be used? Number 1010-0140 (expires 10/31/
(d) Supporting data. If you determine 2006).
the value of production under
paragraph (c) of this section, you
must retain all data relevant to
determination of royalty value..
206.174 (f)......................... How do I value gas production when an 40 1 40
index-based method cannot be used?
(f) Value guidance. You may ask MMS
for guidance in determining value.
You may propose a valuation method 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 20 1 20
qualities of production for computing
royalties?.
(d)(4) You may request MMS approval of
other methods for determining the
quantity of residue gas and gas plant
products allocable to each lease. * *
*.
206.176(b).......................... How do I perform accounting for Burden covered under Sec.
comparison?. 206.173(a)(1).
(b) If you are required to account for
comparison, you may elect to use the
alternative dual accounting
methodology provided for in Sec.
206.173 instead of the provisions in
paragraph (a) of this section.
206.176(c).......................... How do I perform accounting for Burden covered under Sec.
comparison?. 206.172(b)(1)(ii).
(c) * * * If you do not perform dual
accounting, you must certify to MMS
that gas flows into such a pipeline
before it is processed.
----------------------------------------------------------------------------------------------------------------
TRANSPORTATION ALLOWANCES
----------------------------------------------------------------------------------------------------------------
206.177(c)(2) and (c)(3)............ What general requirements regarding Burden covered under OMB Control
transportation allowances apply to Number 1010-0136 (expires 05/31/
me? 2006)
(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
determination..
206.178 (a)(1)(i)................... How do I determine a transportation 1 50 50
allowance?.
(a) Determining a transportation
allowance under an arm's-length
contract..
(1)(i) * * * You are required to
submit to MMS a copy 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..
206.178(a)(1)(iii).................. How do I determine a transportation PRODUCE RECORDS--The ORA
allowance?. determined that the audit process
(a) Determining a transportation is not covered by the PRA because
allowance under an arm's-length MMS staff asks non-standard
contract.. questions to resolve exceptions.
(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..
[[Page 24746]]
206.178(a)(2)(i) and (ii)........... How do I determine a transportation 20 1 20
allowance?.
(a) Determining a transportation
allowance under an arm's-length
contract..
(2)(i) of this section * * * 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 40 1 40
allowance?.
(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 15 7 105
allowance?.
(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 20 1 20
allowance?.
(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
