Agency Information Collection Activities: Submitted for Office of Management and Budget (OMB) Review; Comment Request, 24738-24748 [E6-6208]

Download as PDF 24738 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). wwhite on PROD1PC61 with NOTICES 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). VerDate Aug<31>2005 16:58 Apr 25, 2006 Jkt 208001 • 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. PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 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 http:// 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 E:\FR\FM\26APN1.SGM 26APN1 Federal Register / Vol. 71, No. 80 / Wednesday, April 26, 2006 / Notices 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. wwhite on PROD1PC61 with NOTICES 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. VerDate Aug<31>2005 16:58 Apr 25, 2006 Jkt 208001 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 PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 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 E:\FR\FM\26APN1.SGM 26APN1 24740 Federal Register / Vol. 71, No. 80 / Wednesday, April 26, 2006 / Notices 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 wwhite on PROD1PC61 with NOTICES 202.101 ....................... VerDate Aug<31>2005 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 * * *. 16:58 Apr 25, 2006 Jkt 208001 PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 Burden covered under OMB Control Number 1010–0140 (expires 10/31/2006). Burden covered under § 210.52. E:\FR\FM\26APN1.SGM 26APN1 24741 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 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) ............... wwhite on PROD1PC61 with NOTICES 206.55 (a)(1)(i) ............ 206.55 (a)(2)(i) ............ VerDate Aug<31>2005 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. 16:58 Apr 25, 2006 Jkt 208001 PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 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). E:\FR\FM\26APN1.SGM 26APN1 24742 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 (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) ............... wwhite on PROD1PC61 with NOTICES 206.55 (c)(1)(i) ............ VerDate Aug<31>2005 16:58 Apr 25, 2006 Jkt 208001 PO 00000 Frm 00106 Fmt 4703 Sfmt 4703 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 E:\FR\FM\26APN1.SGM 26APN1 24743 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) ........... wwhite on PROD1PC61 with NOTICES 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, * * *. 16:58 Apr 25, 2006 Jkt 208001 PO 00000 Frm 00107 Fmt 4703 Sfmt 4703 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. E:\FR\FM\26APN1.SGM 26APN1 24744 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) .............. wwhite on PROD1PC61 with NOTICES 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 * * *. 16:58 Apr 25, 2006 Jkt 208001 PO 00000 Frm 00108 Fmt 4703 Sfmt 4703 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. E:\FR\FM\26APN1.SGM 26APN1 24745 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) .......... wwhite on PROD1PC61 with NOTICES 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. 16:58 Apr 25, 2006 Jkt 208001 PO 00000 Frm 00109 Fmt 4703 Sfmt 4703 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. E:\FR\FM\26APN1.SGM 26APN1 24746 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) .............. wwhite on PROD1PC61 with NOTICES 206.178(d)(1) .............. VerDate Aug<31>2005 16:58 Apr 25, 2006 Jkt 208001 PO 00000 Frm 00110 Fmt 4703 Sfmt 4703 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 26APN1 24747 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) .... wwhite on PROD1PC61 with NOTICES 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. 16:58 Apr 25, 2006 Jkt 208001 PO 00000 Frm 00111 Fmt 4703 Sfmt 4703 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 E:\FR\FM\26APN1.SGM 26APN1 24748 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 http:// 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]


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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).

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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 http://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