Agency Information Collection Activities: Submitted for Office of Management and Budget (OMB) Review; Comment Request, 39343-39351 [E6-10884]

Download as PDF Federal Register / Vol. 71, No. 133 / Wednesday, July 12, 2006 / Notices Dated: March 15, 2006. Richard Adamski, Acting Associate Director for Minerals Revenue Management. [FR Doc. E6–10883 Filed 7–11–06; 8:45 am] BILLING CODE 4310–MR–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– 0087). sroberts on PROD1PC70 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 parts 227—Delegation to States; 228—Cooperative Activities with States and Indian Tribes; and 229—Delegation to States. This notice also provides the public a second opportunity to comment on the paperwork burden of these regulatory requirements. This ICR is titled ‘‘30 CFR Part 227—Delegation to States; 30 CFR Part 228—Cooperative Activities with States and Indian Tribes; and 30 CFR Part 229—Delegation to States.’’ We changed the title of this ICR to clarify the regulatory language we are covering under 30 CFR parts 227, 228, and 229 and to reflect OMB approval of consolidation of two ICRs, titled: • ICR 1010–0087: 30 CFR Part 228— Cooperative Activities with States and Indian Tribes; and • ICR 1010–0088: 30 CFR Part 227— Delegation to States. In the two ICRs, much of the general information was repeated and crossreferenced. This consolidated ICR 1010– 0087 eliminates that duplication of effort and redundancy of data and also includes 30 CFR part 229 information collection burden hours, which were not included in the previous information collections (ICRs 1010– 0087 and 1010–0088). DATES: Submit written comments on or before August 11, 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 VerDate Aug<31>2005 18:23 Jul 11, 2006 Jkt 208001 for the Department of the Interior (OMB Control Number 1010–0087). 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. SUPPLEMENTARY INFORMATION: Title: 30 CFR Part 227—Delegation to States; 30 CFR Part 228—Cooperative Activities with States and Indian Tribes; and 30 CFR Part 229—Delegation to States. OMB Control Number: 1010–0087. Bureau Form Number: None. Abstract: The Secretary of the U.S. Department of the Interior is responsible for collecting royalties from lessees who produce minerals from leased Federal and Indian lands. The Secretary is required by various laws to manage mineral resources production on Federal and Indian lands, collect the royalties due, and distribute the funds in accordance with those laws. The Secretary also has a trust responsibility to manage Indian lands and seek advice and information from Indian beneficiaries. The MMS performs the minerals revenue management functions and assists the Secretary in carrying out the Department’s trust responsibility for Indian lands. When a company or an individual enters into a lease to explore, develop, produce, and dispose of minerals from Federal or Indian lands, that company or individual agrees to pay the lessor a share (royalty) of the value received from production on leased lands. The lease creates a business relationship between the lessor and the lessee. The PO 00000 Frm 00064 Fmt 4703 Sfmt 4703 39343 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 collected includes data necessary to ensure that the royalties are accurately valued and appropriately paid. Sections 202 and 205 of the Federal Oil and Gas Royalty Management Act of 1982 (FOGRMA), as amended, authorized the Secretary to develop delegated and cooperative agreements with states and Indian tribes to carry out certain inspection, auditing, investigation, or limited enforcement activities for leases in their jurisdiction. The states and Indian tribes are working partners and are an integral part of the overall onshore and offshore compliance effort. Applicable Citations Applicable citations of the laws pertaining to this ICR include: (1) Public Law 97–451—Jan. 12, 1983, FOGRMA, Sections 202 and 205; and (2) Public Law 104–185—Aug. 13, 1996, as corrected by Public Law 104– 200—Sept. 22, 1996, the Federal Oil and Gas Royalty Simplification and Fairness Act of 1996 (RSFA), Sections 3, 4, and 8. Public laws pertaining to mineral royalties are located on our Web site at https://www.mrm.mms.gov/Laws_R_D/ PublicLawsAMR.htm. Relevant parts of the Code of Federal Regulations (CFR) include 30 CFR parts 227, 228, and 229, as described below: Title 30 CFR part 227, Delegation to States, provides procedures to delegate certain Federal minerals revenue management functions to states for Federal oil and gas, geothermal, and solid mineral leases and leases subject to 8(g) of the Outer Continental Shelf Lands Act, within their state boundaries. Title 30 CFR part 228, Cooperative Activities with States and Tribes, provides procedures to utilize the capabilities of the Indian tribes to carry out audits and related investigations of their respective leased lands. Title 30 CFR part 229, Delegation to States, provides procedures to utilize the capabilities of the states to carry out audits and related investigations of leased Indian lands within their respective state boundaries, by permission of the respective Indian E:\FR\FM\12JYN1.SGM 12JYN1 39344 Federal Register / Vol. 71, No. 133 / Wednesday, July 12, 2006 / Notices tribal councils or individual Indian mineral owners. Effective September 11, 1997, parts 228 and 229 do not apply to Federal lands, due to implementation of RSFA amendments. Delegation to States, 30 CFR Part 227 The states audit Federal lands under provisions of 30 CFR part 227. The Secretary is authorized under Section 205 of FOGRMA, as amended by RSFA Section 3, to delegate to states, all or part of authorities and responsibilities of the Secretary, to conduct inspections, audits, investigations, and limited enforcement activities for leases in their jurisdiction. Specifically, RSFA Section 3 amended FOGRMA Section 205 to add items e through g below for minerals revenue management functions on Federal lands: a. Conducting audits and investigations; b. Issuing demands and subpoenas (except for solid mineral and geothermal leases); c. Issuing orders to perform restructured accounting; d. Issuing related tolling agreements and notices to lessees or their designees; e. Receiving and processing production and royalty reports; f. Correcting erroneous report data; and g. Performing automated verification. Under FOGRMA Eleven states currently have MMSapproved delegation agreements to perform audits and investigations, which are the functions previously authorized under FOGRMA (items a through d above). The most recent delegated agreement was established in 2004 between MMS and the state of Alaska. The states perform nearly all audits on Federal leases within their boundaries and typically receive 50 percent of any additional collections; however, Alaska typically receives 90 percent of onshore royalties. Many states gain efficiencies by performing audits on state severance taxes and concurrently on properties that have both Federal and state interests. Federal royalties are a significant portion of many states’ annual budgets. sroberts on PROD1PC70 with NOTICES Under RFSA Currently, there are no states with MMS-approved delegation agreements. To be considered for delegation under 30 CFR part 227, states must submit a written delegation proposal to, and receive approval from, the MMS Associate Director for MRM. Delegation agreements benefit both MMS and states VerDate Aug<31>2005 18:23 Jul 11, 2006 Jkt 208001 by helping to ensure accurate and timely production reporting, royalty payment, and proper product valuation through the application of an aggressive and comprehensive audit program. When a state performs any of the delegated functions under 30 CFR part 227, the state also assumes the burden of providing various types of information to MMS. Under RSFA, and to properly administer the delegation of the functions to the requesting states, MRM must collect pertinent information from industry and states to ensure that this program continues to operate efficiently and effectively. Currently, companies send all royalty reports and payments (ICR 1010–0140, expires October 31, 2006) and production reports (ICR 1010–0139, expires August 31, 2006) to MRM. The MRM verifies the accuracy of the reports and payments prior to disbursing the funds to states, Indian tribes, individual Indian mineral owners, the U.S. Treasury, and other Federal agencies. If states choose to participate in the delegable function of receiving and processing financial and production reports, payors/reporters must send these reports to each participating state for the Federal leases within that state and to MRM for the remaining Federal leases. The states must verify the accuracy of these reports. The MRM currently handles production and royalty reporting, error correction, endto-end compliance review process, issuing demand letters, and billing actions. The MRM is held accountable to certain measurements and standards and must file reports to outside entities. States choosing to participate in any delegable function will be held to these same measurements and standards and, therefore, will have to provide data to document the work they are performing. This information, provided to MMS in the course of performing delegated agreements, is the focus of this information collection. States must comply with Generally Accepted Accounting Principles (GAAP) and MMS standards, as required under 30 CFR 227.200, and with the MRM Audit Manual, MRM Compliance Review Manual, and Generally Accepted Government Auditing Standards (GAGAS), as required under 30 CFR 227.301. Cooperative Activities With States and Indian Tribes, 30 CFR Part 228 The final rulemaking of Delegation of Royalty Management Functions to States was published on August 12, 1997 (62 FR 43076), effective September 11, 1997, and stated that part 228 does PO 00000 Frm 00065 Fmt 4703 Sfmt 4703 not apply to Federal lands because delegation for Federal lands is now covered under part 227. The Secretary is authorized under FOGRMA Section 202, Cooperative Agreements, as amended by RSFA Section 8, to enter into cooperative agreements with any state or Indian tribe upon their written request; to share oil or gas revenue management information; and to use the capabilities of states and Indian tribes to carry out inspection, royalty audit, and related investigation and enforcement activities. States There are no states with cooperative agreements, as no state has proposed to enter into a cooperative agreement or to undertake activities on Indian lands within its boundaries. Indian Tribes Currently, seven Indian tribes have cooperative agreements to perform audits and investigations. When an Indian tribe performs any of the cooperative activities under 30 CFR part 228, the Indian tribe also assumes the burden of providing various types of information to MMS. This information, provided to MMS in the course of performing cooperative activities, is the focus of this information collection. After the request is accepted and a cooperative agreement is in effect, Indian tribes must submit an annual workplan and budget, as well as quarterly reimbursement vouchers. They must follow GAAP and MMS standards as required under 30 CFR 228.102. The cooperative agreements also require them to comply with the MRM Audit Manual, MRM Compliance Review Manual, and GAGAS. Cooperative activities benefit both MMS and Indian tribes by helping to ensure accurate and timely production reporting, proper product valuation, and accurate and timely royalty payment through the application of an aggressive and comprehensive audit program. Indian tribes currently manage audits for 89 percent of all tribal mineral royalties. Major focus in FY 2007 provide for additional full-time MMS employees to provide increased oversight of Indian tribal audits due to a recent court decision. To be considered for a cooperative audit agreement, Indian tribes must comply with the regulations at 30 CFR part 228. Indian tribes who want to perform royalty audits in cooperation with MMS must submit a written proposal to enter into a cooperative agreement, signed by the tribal chairman or other appropriate official, to the MMS Director. The request E:\FR\FM\12JYN1.SGM 12JYN1 39345 Federal Register / Vol. 71, No. 133 / Wednesday, July 12, 2006 / Notices should outline the activities to be undertaken and present evidence that the Indian tribe(s) can meet the standards established by the Secretary for the activities to be conducted. Prior to beginning work, approval must be obtained from the MMS Director. Delegation to States, 30 CFR Part 229 The final rulemaking of Delegation of Royalty Management Functions to States was published on August 12, 1997 (62 FR 43076), effective September 11, 1997, and stated that part 229 does not apply to Federal lands because delegation for Federal lands is now covered under part 227. At this time, no state has proposed to undertake delegated functions on Indian lands within its boundaries. Under the Secretary’s delegation of authority at this part, a state may conduct audits and related investigations of oil and gas payments made to MMS regarding leased Indian lands within the state’s boundaries. A state must receive written permission from the respective Indian tribe(s) or individual Indian mineral owner(s). After receiving written permission, the governor or other authorized official of a state may petition the Secretary to assume responsibilities of conducting audits and related investigation of Indian oil and gas leases. A state petitioning for a delegation of authority will have the opportunity to present testimony at a public hearing within the state. After the state receives approval of the Secretary’s delegation of authority, it must submit annual audit workplans detailing its audits and related investigations, annual budgets, and quarterly reimbursement vouchers. The state shall maintain books and records and provide a quarterly summary of costs following Department standards, as required under 30 CFR 229.109. In addition, 30 CFR 229.101(b), covering the Federal Government’s administration of delegations, states: (b) A State may enter into a delegation of authority under this part [229] without affecting a State’s ability to enter into a cooperative agreement under part 228 of this chapter. Summary Proprietary information submitted to MMS under this collection is protected. No items of a sensitive nature are collected. The opportunity to engage in these programs is voluntary; however, if the respondents want to receive benefits, the requirement for response is mandatory. Frequency of Response: Varies based on the function performed. Estimated Number and Description of Respondents: 11 states and 7 Indian tribes. Estimated Annual Reporting and Recordkeeping ‘‘Hour’’ Burden: 6,194 hours. We are revising this ICR to include reporting requirements from part 229 citations that were overlooked in the previous renewal, and we have adjusted the burden hours accordingly. The MMS estimates 774 responses each year from the 11 states and 7 Indian tribes. We estimate the total annual burden is 6,194 (4,389 for states and 1,805 for Indian tribes) reporting and recordkeeping hours. Due to the complexity of the chart below, we are detailing the number of burden hours for the states and Indian tribes. • States: We estimate 711 responses (695 from 30 CFR part 227 and 16 from part 229) from 11 states. We estimate the total annual burden for these responses is 4,389 (4,373 from 30 CFR part 227 and 16 from 30 CFR part 229) reporting and recordkeeping hours due to historical information. • Indian tribes: We estimate 63 responses (from 30 CFR part 228) from 7 Indian tribes. We estimate the total annual burden for these responses is 1,805 reporting and recordkeeping hours due to historical information. 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’ ESTIAMTED ANNUAL BURDEN HOURS 30 CFR section Hour burden per response Reporting and recordkeeping requirements Number of annual responses Annual burden hours Part 227—Delegation to States Delegation Proposals 227.103 ............... What must a State’s delegation proposal contain? If you want MMS to delegate royalty management functions to you, then you must submit a delegation proposal to the MMS Associate Diector for Minerals Revenue Management. MMS will provide you with technical assistance and information to help you prepare your delegation proposal. * * * 200 1 Delegation Process 227.107 ............... sroberts on PROD1PC70 with NOTICES 227.109 ............... VerDate Aug<31>2005 When will the MMS Director decide whether to approve a State’s delegation proposal? The MMS Director will decide whether to approve your delegation proposal within 90 days after your delegation proposal is considered complete under § 227.104. MMS may extend the 90-day period with your written consent. What if the MMS Director denies a State’s delegation proposal? If the MMS Director denies your delegation proposal, MMS will state the reasons for denial. MMS also will inform you in writing of the conditions you must meet to receive approval. You may submit a new delegation proposal at any time following a denial. 19:28 Jul 11, 2006 Jkt 208001 PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 Hour burden covered under § 227.103 Hour burden covered under § 227.103. E:\FR\FM\12JYN1.SGM 12JYN1 200 39346 Federal Register / Vol. 71, No. 133 / Wednesday, July 12, 2006 / Notices RESPONDENTS’ ESTIAMTED ANNUAL BURDEN HOURS—Continued Hour burden per response 30 CFR section Reporting and recordkeeping requirements 227.110(a) ........... When and for how long are delegation agreements effective? (a) Delegation agreements are effective for 3 years from the date the MMS Director signs the delegation agreement. However, during the development of the State’s delegation proposal under § 227.108 of this part, MMS, the delegated State, and any other affected person will determine an appropriate transition period for lessees and their designees to modify their systems to comply with any new requirements under a delegation agreement * * *. (b) You may ask MMS to renew the delegation for an additional 3 years no less than 6 months before your 3-year delegation agreement expires. You must submit your renewal request to the MMS Associate Director for Minerals Revenue Management as follows: (1) If you do not want to change the terms of your delegation agreement for the renewal period, you need only ask to extend your existing agreement for the 3-year renewal period. * * * (b)(2) If you want to change the terms of your delegation agreement for the renewal period, you must submit a new delegation proposal under this part. (c) The MMS Director may approve your renewal request only if MMS determines that you are meeting the requirements of the applicable standards and regulations. If the MMS Director denies your renewal request, MMS will state the reasons for denial. MMS also will inform you in writing of the conditions you must meet to receive approval. You may submit a new renewal request any time after denial.. (d) After the 3-year renewal period for your delegation agreement ends, if you wish to continue performing one or more delegated functions, you must request a new delegation agreement from MMS under this part. MMS will schedule a hearing on your request, if MMS determines a hearing is appropriate. * * * (e) If you do not request a hearing under paragraphs (b)(1) or (d) of this section, any other affected person may submit a written request for a hearing under those paragraphs to the MMS Associate Director for Minerals Revenue Management. 227.110(b) and (b)(1). 227.110(b)(2) ...... 227.110(c) ........... 227.110(d) ........... 227.110(e) ........... Existing Delegations Do existing delegation agreements remain in effect? This section explains your options if you have a delegation agreement in effect on the effective date of this regulation. 227.111(a) and (b). Number of annual responses Annual burden hours Hour burden covered under § 227.103. Hour burden covered under § 227.103. 15 11 165 Hour burden covered under § 227.103. Hour burden covered under § 227.103. Hour burden covered under § 227.103. Hour burden covered under § 227.103. (a) * * * Before the agreement expires, if you wish to continue to perform one or more of the delegated functions you performed under the expired agreement, you must request a new delegation agreement meeting the requirements of this part and the applicable standards. (b) If you want to perform royalty management functions in addition to those authorized under your existing agreement, you must request a new delegation agreement under this part.. 227.112(d) ........... 227.112(e) ........... sroberts on PROD1PC70 with NOTICES 227.200(a), (b), (c), and (d). VerDate Aug<31>2005 Compensation What compensation will a State receive to perform delegated functions? You will receive compensation for your costs to perform each delegated function subject to the following conditions. * * * (d) At a minimum, you must provide vouchers detailing your expenditures quarterly during the fiscal year. However, you may agree to provide vouchers on a monthly basis in your delegation agreement. * * * (e) You must maintain adequate books and records to support your vouchers. * * * 4 Jkt 208001 PO 00000 Frm 00067 Fmt 4703 Sfmt 4703 336 Hour burden covered under § 227.200(d). States’ Responsibilities to Perform Delegated Functions What are a State’s general responsibilities if it accepts a delegation? For each delegated function you perform, you must: (a) * * * seek information or guidance from MMS regarding new, complex, or unique issues. * * * (b)(1) * * * Provide complete disclosure of financial results of activities; (2) Maintain correct and accurate records of all mineral-related transactions and accounts; (3) Maintain effective controls and accountability; (4) Maintain a system of accounts. * * * 19:28 Jul 11, 2006 1 84 E:\FR\FM\12JYN1.SGM 200 12JYN1 11 2,200 39347 Federal Register / Vol. 71, No. 133 / Wednesday, July 12, 2006 / Notices RESPONDENTS’ ESTIAMTED ANNUAL BURDEN HOURS—Continued 30 CFR section 227.200(e) ........... 227.200(f) ............ 227.200(h) ........... 227.200(g) and 227.301(e). § 227.200 227.400(a)(4) and (a)(6). 227.400(c) ........... 227.401(d) ........... 227.401(e) ........... 227.501(c) ........... 227.601(c) ........... 227.601(d) ........... Hour burden per response Reporting and recordkeeping requirements (5) Maintain adequate royalty and production information. * * * (c) Assist MMS in meeting the requirements of the Government Performance and Results Act (GPRA). * * * (d) Maintain all records you obtain or create under your delegated function, such as royalty reports, production reports, and other related information. * * * You must maintain such records for at least 7 years. * * * (e) Provide reports to MMS about your activities under your delegated functions. * * * At a minimum, you must provide periodic statistical reports to MMS summarizing the activities you carried out. * * * (f) Assist MMS in maintaining adequate reference, royalty, and production databases. * * * (h) Help MMS respond to requests for information from other Federal agencies, Congress, and the public * * * What are a State’s general responsibilities if it accepts a delegation? (g) Develop annual work plans. * * * § 227.301 What are a State’s responsibilities if it performs audits? If you perform audits you must * * * (e) Prepare and submit MMS Audit Work Plans. * * * What functions may a State perform in processing production reports or royalty reports? Production reporters or royalty reporters provide production, sales, and royalty information on mineral production from leases that must be collected, analyzed, and corrected. (a) If you request delegation of either production report or royalty report processing functions, you must perform * * * (4) Timely transmitting production report or royalty report data to MMS and other affected Federal agencies. * * * (6) Providing production data or royalty data to MMS and other affected Federal agencies. * * * (c) You must provide MMS with a copy of any exceptions from reporting and payment requirements for marginal properties and any alternative royalty and payment requirements for unit agreements and communitization agreements you approve. What are a State’s responsibilities if it processes production reports or royalty reports? In processing production reports or royalty reports you must * * * (d) Timely transmit required production or royalty data to MMS and other affected Federal agencies. * * * In processing production reports or royalty reports you must * * * (e) Access well, lease, agreement, and reporter reference data from MMS, and provide updated information to MMS. * * * What are a State’s responsibilities to ensure that reporters correct erroneous data? (c) Submit accepted and corrected lines to MMS to allow processing in a timely manner. * * * What are a State’s responsibilities if it performs automated verification? To perform automated verification of production reports or royalty reports, you must * * * (c) Maintain all documentation and logging procedures. * * * (d) Access well, lease, agreement, and production reporter or royalty reporter reference data from MMS and provide updated information to MMS. * * * Number of annual responses Annual burden hours 3 2 44 132 1 250 250 8 10 80 60 11 660 1 250 250 1 12 12 Hour burden covered under § 227.400(a)(4) and (a)(6). Hour burden covered under § 227.200(f). Hour burden covered under § 227.400(a)(4) and (a)(6). 8 11 Hour burden covered under § 227.200(f). Performance Review 227.801(a) ........... sroberts on PROD1PC70 with NOTICES 227.804 ............... 227.805 ............... VerDate Aug<31>2005 What if a State does not adequately perform a delegated function? If your performance of the delegated function does not comply with your delegation agreement * * * (a) * * * You may ask MMS for an extension of time to comply with the notice. In your extension request you must explain why you need more time. * * * How else may a State’s delegation agreement terminate? You may request MMS to terminate your delegation at any time by submitting your written notice of intent 6 months prior to the date on which you want to terminate. * * * How may a State obtain a new delegation agreement after termination? After your delegation agreement is terminated, you may apply again for delegation by beginning with the proposal process. * * * 18:23 Jul 11, 2006 Jkt 208001 PO 00000 Frm 00068 Fmt 4703 Sfmt 4703 Hour burden covered under § 227.200(e). Hour burden covered under § 227.200(e). Hour burden covered under § 227.103. E:\FR\FM\12JYN1.SGM 12JYN1 88 39348 Federal Register / Vol. 71, No. 133 / Wednesday, July 12, 2006 / Notices RESPONDENTS’ ESTIAMTED ANNUAL BURDEN HOURS—Continued 30 CFR section Hour burden per response Reporting and recordkeeping requirements Subtotal Burden for 30 CFR Part 227 Number of annual responses Annual burden hours 695 4,373 200 1 200 15 7 105 Part 228—Cooperative Activities With States and Indian Tribes Subpart C—Oil and Gas, Onshore 228.100(a) and (b). 228.101(a) ........... 228.101(c) ........... 228.101(d) ........... 228.103(a) and (b). 228.105(a)(1) and (a)(2). 228.105(c) ........... sroberts on PROD1PC70 with NOTICES 228.107(b) ........... VerDate Aug<31>2005 Entering into an agreement ....................................................................... (a) * * * Indian tribe may request the Department to enter into a cooperative agreement by sending a letter from * * * tribal chairman * * * to the Director of MMS. (b) The request for an agreement shall be in a format prescribed by MMS and should include at a minimum the following information: (1) Type of eligible activities to be undertaken. (2) Proposed term of the agreement. (3) Evidence that * * * Indian tribe meets, or can meet by the time the agreement is in effect. * * * (4) If the State is proposing to undertake activities on Indian lands located within the State, a resolution from the appropriate tribal council indicating their agreement to delegate to the State responsibilities under the terms of the cooperative agreement for activities to be conducted on tribal or allotted land. Terms of agreement ................................................................................... (a) Agreements entered into under this part shall be valid for a period of 3 years and shall be renewable * * * upon request of * * * Indian tribe. * * * (c) * * * Indian tribe may unilaterally terminate an agreement by giving a 120-day written notice of intent to terminate. (d) * * * Indian tribe will be given 60 days to respond to the notice of deficiencies and to provide a plan for correction of those deficiencies. * * * Maintenance of records ............................................................................. (a) * * * Indian tribe entering into a cooperative agreement under this part must retain all records, reports, working papers, and any backup materials. * * * (b) * * * Indian tribe shall maintain all books and records. * * * Funding of cooperative agreements .......................................................... (a)(1) The Department may, under the terms of the cooperative agreement, reimburse * * * Indian tribe up to 100 percent of the costs of eligible activities. Eligible activities will be agreed upon annually upon the submission and approval of a work plan and funding requirement. (2) A cooperative agreement may be entered into with * * * Indian tribe, upon request, without a requirement for reimbursement of costs by the Department. (c) * * * Indian tribe shall submit a voucher for reimbursement of eligible costs incurred within 30 days of the end of each calendar quarter. * * * Indian tribe must provide the Department a summary of costs incurred, for which * * * Indian tribe is seeking reimbursement, with the voucher. Eligible cost of activities ............................................................................. (b) * * * Each cooperative agreement shall contain detailed schedules identifying those activities and costs which qualify for funding and the procedures, timing, and mechanics for implementing Federal funding. 18:23 Jul 11, 2006 Jkt 208001 PO 00000 Frm 00069 Fmt 4703 Sfmt 4703 Hour burden covered under § 228.100(a). 80 1 80 120 7 840 60 7 420 4 340 160 Hour burden covered under § 228.100(a) and (b). E:\FR\FM\12JYN1.SGM 12JYN1 39349 Federal Register / Vol. 71, No. 133 / Wednesday, July 12, 2006 / Notices RESPONDENTS’ ESTIAMTED ANNUAL BURDEN HOURS—Continued 30 CFR section Hour burden per response Reporting and recordkeeping requirements Subtotal Burden for 30 CFR Part 228 Number of annual responses Annual burden hours 63 1,805 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 PART 229—Delegation to States Subpart C—Oil and Gas, Onshore Administration of Delegations 229.100(a)(1) and (a)(2). 229.101(a) and (d). 229.102(c) ........... 229.103(c) ........... 229.105 ............... 229.106 ............... sroberts on PROD1PC70 with NOTICES 229.109(a) ........... 229.109(b) ........... VerDate Aug<31>2005 Authorities and responsibilities subject to delegation ................................ (a) All or part of the following authorities and responsibilities of the Secretary under the Act may be delegated to a State authority: (1) Conduct of audits related to oil and gas royalty payments made to the MMS which are attributable to leased * * * Indian lands within the State. Delegations with respect to any Indian lands require the written permission, subject to the review of the MMS, of the affected Indian tribe or allottee. (2) Conduct of investigation related to oil and gas royalty payments made to the MMS which are attributable to * * * Indian lands within the State. Delegation with respect to any Indian lands require the written permission, subject to the review of the MMS, of the affected Indian tribe or allottee. No investigation will be initiated without the specific approval of the MMS. * * * Petition for delegation ................................................................................ (a) The governor or other authorized official of any State which contains * * * Indian oil and gas leases where the Indian tribe and allottees have given the State an affirmative indication of their desire for the State to undertake certain royalty management-related activities on their lands, may petition the Secretary to assume responsibilities to conduct audits and related investigations of royalty related matters affecting * * * Indian oil and gas leases within the State. (d) In the event that the Secretary denies the petition, the Secretary must provide the State with the specific reasons for denial of the petition. The State will then have 60 days to either contest or correct specific deficiencies and to reapply for a delegation of authority. Fact-finding and hearings .......................................................................... (c) A State petitioning for a delegation of authority shall be given the opportunity to present testimony at a public hearing. Duration of delegations; termination of delegations .................................. (c) A State may terminate a delegation of authority by giving a 120-day written notice of intent to terminate. Evidence of Indian agreement to delegation ............................................. In the case of a State seeking a delegation of authority for Indian lands * * * the State petition to the Secretary must be supported by an appropriate resolution or resolutions of tribal councils joining the State in petitioning for delegation and evidence of the agreement of individual Indian allottees whose lands would be involved in a delegation. Such evidence shall specifically speak to having the State assume delegated responsibility for specific functions related to royalty management activities. Withdrawal of Indian lands from delegated authority ................................ If at any time an Indian tribe or an individual Indian allottee determines that it wishes to withdraw from the State delegation of authority in relation to its lands, it may do so by sending a petition of withdrawal to the State. * * * Reimbursement for costs incurred by a State under the delegation of authority. (a) The Department of the Interior (DOI) shall reimburse the State for 100 percent of the direct cost associated with the activities undertaken under the delegation of authority. The State shall maintain books and records in accordance with the standards established by the DOI and will provide the DOI, on a quarterly basis, a summary of costs incurred. * * * (b) The State shall submit a voucher for reimbursement of costs incurred within 30 days of the end of each calendar quarter. 19:28 Jul 11, 2006 Jkt 208001 PO 00000 Frm 00070 Fmt 4703 Sfmt 4703 E:\FR\FM\12JYN1.SGM 12JYN1 39350 Federal Register / Vol. 71, No. 133 / Wednesday, July 12, 2006 / Notices RESPONDENTS’ ESTIAMTED ANNUAL BURDEN HOURS—Continued 30 CFR section Hour burden per response Reporting and recordkeeping requirements Number of annual responses Annual burden hours Delegation Requirements 229.120 ............... 229.121(a), (b), (c), and (d). 229.122(a), (b), and (c). 229.123(b)(3)(i) ... 229.124 ............... 229.125(a) and (b). sroberts on PROD1PC70 with NOTICES 229.126(a) and (b). VerDate Aug<31>2005 Obtaining regulatory and policy guidance ................................................. All activities performed by a State under a delegation must be in full accord with all Federal laws, rules and regulations, and Secretarial and agency determinations and orders relating to the calculation, reporting, and payment of oil and gas royalties. In those cases when guidance or interpretations are necessary, the State will direct written requests for such guidance or interpretation to the appropriate MMS officials.* * * Recordkeeping requirements ..................................................................... (a) The State shall maintain in a safe and secure manner all records, workpapers, reports, and correspondence gained or developed as a consequence of audit or investigative activities conducted under the delegation. * * * (b) The State must maintain in a confidential manner all data obtained from DOI sources or from payor or company sources under the delegation. * * * (c) All records subject to the requirements of paragraph (a) must be maintained for a 6-year period measured from the end of the calendar year in which the records were created. * * * Upon termination of a delegation, the State shall, within 90 days from the date of termination, assemble all records specified in subsection (a), complete all working paper files in accordance with 229.124, and transfer such records to the MMS. (d) The State shall maintain complete cost records for the delegation in accordance with generally accepted accounting principles.* * * Coordination of audit activities ................................................................... (a) Each State with a delegation of authority shall submit annually to the MMS an audit workplan specifically identifying leases, resources, companies, and payors scheduled for audit. * * * A State may request changes to its workplan * * * at the end of each quarter of each fiscal year. All requested changes are subject to approval by the MMS and must be submitted in writing. (b) When a State plans to audit leases of a lessee or royalty payor for which there is an MMS or OIG resident audit team, all audit activities must be coordinated through the MMS or OIG resident supervisor. * * * (c) The State shall consult with the MMS and/or OIG regarding resolution of any coordination problems encountered during the conduct of delegation activities. Standards for audit activities ...................................................................... (b)(3) Standards of reporting. (i) Written audit reports are to be submitted to the appropriate MMS officials at the end of each field examination. Documentation standards .......................................................................... Every audit performed by a State under a delegation of authority must meet certain documentation standards. In particular, detailed workpapers must be developed and maintained. Preparation and issuance of enforcement documents. ............................. (a) Determinations of additional royalties due resulting from audit activities conducted under a delegation of authority must be formally communicated by the State, to the companies or other payors by an issue letter prior to any enforcement action. * * * (b) After evaluating the company or payor’s response to the issue letter, the State shall draft a demand letter which will be submitted with supporting workpaper files to the MMS for appropriate enforcement action. Any substantive revisions to the demand letter will be discussed with the State prior to issuance of the letter.* * * Appeals ...................................................................................................... (a) * * * The State regulatory authority shall, upon the request of the MMS, provide competent and knowledgeable staff for testimony, as well as any required documentation and analyses, in support of the lessor’s position during the appeal process. (b) An affected State, upon the request of the MMS, shall provide expert witnesses from their audit staff for testimony as well as required documentation and analyses to support the Department’s position during the litigation of court cases arising from denied appeals. * * * 18:23 Jul 11, 2006 Jkt 208001 PO 00000 Frm 00071 Fmt 4703 Sfmt 4703 E:\FR\FM\12JYN1.SGM 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 12JYN1 39351 Federal Register / Vol. 71, No. 133 / Wednesday, July 12, 2006 / Notices RESPONDENTS’ ESTIAMTED ANNUAL BURDEN HOURS—Continued Hour burden per response 30 CFR section Reporting and recordkeeping requirements 229.127 ............... Reports from States ................................................................................... The State, acting under the authority of the Secretarial delegation, shall submit quarterly reports which will summarize activities carried out by the State during the preceding quarter of the year under the provisions of the delegation. * * * Annual burden hours 1 1 Subtotal Burden for 30 CFR Part 229 16 16 Total Burden ............................................................................................................................................................ 774 6,194 1 Note: 2 Note: sroberts on PROD1PC70 with NOTICES 3 Note: 1 Number of annual responses 5 states × 12 monthly vouchers = 60 and 6 states x 4 quarterly vouchers = 24 4 quarterly reports × 11 states = 44 1 tribe × 12 monthly vouchers = 12 and 7 tribes × 4 quarterly vouchers = 28 Estimated Annual Reporting and Recordkeeping ‘‘Non-hour’’ Cost Burden: Due to more current information, we have identified no ‘‘non-hour cost’’ burden for this information collection. 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 October 25, 2005 (70 FR 61631), announcing that we would submit this ICR to OMB for approval. The notice provided the required 60-day comment period. We received no comments in response to the notice. If you wish to comment in response to this notice, you may send your comments to the offices listed under the ADDRESSES section of this notice. The OMB has up to 60 days to approve or disapprove the information collection but may respond after 30 days. VerDate Aug<31>2005 18:23 Jul 11, 2006 Jkt 208001 Therefore, to ensure maximum consideration, OMB should receive public comments by August 11, 2006. Public Comment Policy: We will post all comments in response to this notice on our Web site at https:// www.mrm.mms.gov/Laws_R_D/InfoColl/ InfoColCom.htm. We will also make copies of the comments available for public review, including names and addresses of respondents, during regular business hours at our offices in Lakewood, Colorado. Upon request, we will withhold an individual respondent’s home address from the public record, as allowable by law. There also may be circumstances in which we would withhold a respondent’s identity, as allowable by law. If you request that we withhold your name and/or address, state your request prominently at the beginning of your comment. However, we will not consider anonymous comments. We will make all submissions from organizations or businesses, and from individuals identifying themselves as representatives or officials of organizations or businesses, available for public inspection in their entirety. MMS Information Collection Clearance Officer: Arlene Bajusz, (202) 208–7744. Dated: June 7, 2006. Lucy Querques Denett, Associate Director for Minerals Revenue Management. [FR Doc. E6–10884 Filed 7–11–06; 8:45 am] BILLING CODE 4310–MR–P PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 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 extension of an information collection (1010–0137). 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 for the Notice to Lessees (NTL) on the Historical Well Data Cleanup (HWDC) Project. This notice also provides the public a second opportunity to comment on the paperwork burden of these regulatory requirements. DATES: Submit written comments by August 11, 2006. ADDRESSES: You may submit comments on this information collection directly to the Office of Management and Budget (OMB), Office of Information and Regulatory Affairs, OMB, Attention: Desk Officer for the Department of the Interior via OMB e-mail: (OIRA_DOCKET@omb.eop.gov); or by fax (202) 395–6566; identify with (1010– 0137). Submit a copy of your comments to the Department of the Interior, MMS, via: • MMS’s Public Connect on-line commenting system, https:// ocsconnect.mms.gov. Follow the instructions on the Web site for submitting comments. • E-mail MMS at rules.comments@mms.gov. Use Information Collection Number 1010– 0137 in the subject line. E:\FR\FM\12JYN1.SGM 12JYN1

Agencies

[Federal Register Volume 71, Number 133 (Wednesday, July 12, 2006)]
[Notices]
[Pages 39343-39351]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-10884]

-----------------------------------------------------------------------

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 1010-0087).

-----------------------------------------------------------------------

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 parts 227--Delegation to
States; 228--Cooperative Activities with States and Indian Tribes; and
229--Delegation to States. This notice also provides the public a
second opportunity to comment on the paperwork burden of these
regulatory requirements. This ICR is titled ``30 CFR Part 227--
Delegation to States; 30 CFR Part 228--Cooperative Activities with
States and Indian Tribes; and 30 CFR Part 229--Delegation to States.''
We changed the title of this ICR to clarify the regulatory language we
are covering under 30 CFR parts 227, 228, and 229 and to reflect OMB
approval of consolidation of two ICRs, titled:
ICR 1010-0087: 30 CFR Part 228--Cooperative Activities
with States and Indian Tribes; and
ICR 1010-0088: 30 CFR Part 227--Delegation to States.
In the two ICRs, much of the general information was repeated and
cross-referenced. This consolidated ICR 1010-0087 eliminates that
duplication of effort and redundancy of data and also includes 30 CFR
part 229 information collection burden hours, which were not included
in the previous information collections (ICRs 1010-0087 and 1010-0088).

DATES: Submit written comments on or before August 11, 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 1010-0087).
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.

SUPPLEMENTARY INFORMATION:
Title: 30 CFR Part 227--Delegation to States; 30 CFR Part 228--
Cooperative Activities with States and Indian Tribes; and 30 CFR Part
229--Delegation to States.
OMB Control Number: 1010-0087.
Bureau Form Number: None.
Abstract: The Secretary of the U.S. Department of the Interior is
responsible for collecting royalties from lessees who produce minerals
from leased Federal and Indian lands. The Secretary is required by
various laws to manage mineral resources production on Federal and
Indian lands, collect the royalties due, and distribute the funds in
accordance with those laws.
The Secretary also has a trust responsibility to manage Indian
lands and seek advice and information from Indian beneficiaries. The
MMS performs the minerals revenue management functions and assists the
Secretary in carrying out the Department's trust responsibility for
Indian lands.
When a company or an individual enters into a lease to explore,
develop, produce, and dispose of minerals from Federal or Indian lands,
that company or individual agrees to pay the lessor a share (royalty)
of the value received from production on 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 collected
includes data necessary to ensure that the royalties are accurately
valued and appropriately paid.
Sections 202 and 205 of the Federal Oil and Gas Royalty Management
Act of 1982 (FOGRMA), as amended, authorized the Secretary to develop
delegated and cooperative agreements with states and Indian tribes to
carry out certain inspection, auditing, investigation, or limited
enforcement activities for leases in their jurisdiction. The states and
Indian tribes are working partners and are an integral part of the
overall onshore and offshore compliance effort.

Applicable Citations

Applicable citations of the laws pertaining to this ICR include:
(1) Public Law 97-451--Jan. 12, 1983, FOGRMA, Sections 202 and 205;
and
(2) Public Law 104-185--Aug. 13, 1996, as corrected by Public Law
104-200--Sept. 22, 1996, the Federal Oil and Gas Royalty Simplification
and Fairness Act of 1996 (RSFA), Sections 3, 4, and 8.
Public laws pertaining to mineral royalties are located on our Web
site at https://www.mrm.mms.gov/Laws_R_D/PublicLawsAMR.htm.
Relevant parts of the Code of Federal Regulations (CFR) include 30
CFR parts 227, 228, and 229, as described below:
Title 30 CFR part 227, Delegation to States, provides procedures to
delegate certain Federal minerals revenue management functions to
states for Federal oil and gas, geothermal, and solid mineral leases
and leases subject to 8(g) of the Outer Continental Shelf Lands Act,
within their state boundaries.
Title 30 CFR part 228, Cooperative Activities with States and
Tribes, provides procedures to utilize the capabilities of the Indian
tribes to carry out audits and related investigations of their
respective leased lands.
Title 30 CFR part 229, Delegation to States, provides procedures to
utilize the capabilities of the states to carry out audits and related
investigations of leased Indian lands within their respective state
boundaries, by permission of the respective Indian

[[Page 39344]]

tribal councils or individual Indian mineral owners.
Effective September 11, 1997, parts 228 and 229 do not apply to
Federal lands, due to implementation of RSFA amendments.

Delegation to States, 30 CFR Part 227

The states audit Federal lands under provisions of 30 CFR part 227.
The Secretary is authorized under Section 205 of FOGRMA, as amended by
RSFA Section 3, to delegate to states, all or part of authorities and
responsibilities of the Secretary, to conduct inspections, audits,
investigations, and limited enforcement activities for leases in their
jurisdiction. Specifically, RSFA Section 3 amended FOGRMA Section 205
to add items e through g below for minerals revenue management
functions on Federal lands:
a. Conducting audits and investigations;
b. Issuing demands and subpoenas (except for solid mineral and
geothermal leases);
c. Issuing orders to perform restructured accounting;
d. Issuing related tolling agreements and notices to lessees or
their designees;
e. Receiving and processing production and royalty reports;
f. Correcting erroneous report data; and
g. Performing automated verification.

Under FOGRMA

Eleven states currently have MMS-approved delegation agreements to
perform audits and investigations, which are the functions previously
authorized under FOGRMA (items a through d above). The most recent
delegated agreement was established in 2004 between MMS and the state
of Alaska.
The states perform nearly all audits on Federal leases within their
boundaries and typically receive 50 percent of any additional
collections; however, Alaska typically receives 90 percent of onshore
royalties. Many states gain efficiencies by performing audits on state
severance taxes and concurrently on properties that have both Federal
and state interests. Federal royalties are a significant portion of
many states' annual budgets.

Under RFSA

Currently, there are no states with MMS-approved delegation
agreements. To be considered for delegation under 30 CFR part 227,
states must submit a written delegation proposal to, and receive
approval from, the MMS Associate Director for MRM. Delegation
agreements benefit both MMS and states by helping to ensure accurate
and timely production reporting, royalty payment, and proper product
valuation through the application of an aggressive and comprehensive
audit program.
When a state performs any of the delegated functions under 30 CFR
part 227, the state also assumes the burden of providing various types
of information to MMS. Under RSFA, and to properly administer the
delegation of the functions to the requesting states, MRM must collect
pertinent information from industry and states to ensure that this
program continues to operate efficiently and effectively.
Currently, companies send all royalty reports and payments (ICR
1010-0140, expires October 31, 2006) and production reports (ICR 1010-
0139, expires August 31, 2006) to MRM. The MRM verifies the accuracy of
the reports and payments prior to disbursing the funds to states,
Indian tribes, individual Indian mineral owners, the U.S. Treasury, and
other Federal agencies. If states choose to participate in the
delegable function of receiving and processing financial and production
reports, payors/reporters must send these reports to each participating
state for the Federal leases within that state and to MRM for the
remaining Federal leases. The states must verify the accuracy of these
reports. The MRM currently handles production and royalty reporting,
error correction, end-to-end compliance review process, issuing demand
letters, and billing actions.
The MRM is held accountable to certain measurements and standards
and must file reports to outside entities. States choosing to
participate in any delegable function will be held to these same
measurements and standards and, therefore, will have to provide data to
document the work they are performing. This information, provided to
MMS in the course of performing delegated agreements, is the focus of
this information collection. States must comply with Generally Accepted
Accounting Principles (GAAP) and MMS standards, as required under 30
CFR 227.200, and with the MRM Audit Manual, MRM Compliance Review
Manual, and Generally Accepted Government Auditing Standards (GAGAS),
as required under 30 CFR 227.301.

Cooperative Activities With States and Indian Tribes, 30 CFR Part 228

States

There are no states with cooperative agreements, as no state has
proposed to enter into a cooperative agreement or to undertake
activities on Indian lands within its boundaries.

Indian Tribes

Currently, seven Indian tribes have cooperative agreements to
perform audits and investigations. When an Indian tribe performs any of
the cooperative activities under 30 CFR part 228, the Indian tribe also
assumes the burden of providing various types of information to MMS.
This information, provided to MMS in the course of performing
cooperative activities, is the focus of this information collection.
After the request is accepted and a cooperative agreement is in effect,
Indian tribes must submit an annual workplan and budget, as well as
quarterly reimbursement vouchers. They must follow GAAP and MMS
standards as required under 30 CFR 228.102. The cooperative agreements
also require them to comply with the MRM Audit Manual, MRM Compliance
Review Manual, and GAGAS.
Cooperative activities benefit both MMS and Indian tribes by
helping to ensure accurate and timely production reporting, proper
product valuation, and accurate and timely royalty payment through the
application of an aggressive and comprehensive audit program.
Indian tribes currently manage audits for 89 percent of all tribal
mineral royalties. Major focus in FY 2007 provide for additional full-
time MMS employees to provide increased oversight of Indian tribal
audits due to a recent court decision.
To be considered for a cooperative audit agreement, Indian tribes
must comply with the regulations at 30 CFR part 228. Indian tribes who
want to perform royalty audits in cooperation with MMS must submit a
written proposal to enter into a cooperative agreement, signed by the
tribal chairman or other appropriate official, to the MMS Director. The
request

[[Page 39345]]

should outline the activities to be undertaken and present evidence
that the Indian tribe(s) can meet the standards established by the
Secretary for the activities to be conducted. Prior to beginning work,
approval must be obtained from the MMS Director.

Delegation to States, 30 CFR Part 229

The final rulemaking of Delegation of Royalty Management Functions
to States was published on August 12, 1997 (62 FR 43076), effective
September 11, 1997, and stated that part 229 does not apply to Federal
lands because delegation for Federal lands is now covered under part
227.
At this time, no state has proposed to undertake delegated
functions on Indian lands within its boundaries.
Under the Secretary's delegation of authority at this part, a state
may conduct audits and related investigations of oil and gas payments
made to MMS regarding leased Indian lands within the state's
boundaries. A state must receive written permission from the respective
Indian tribe(s) or individual Indian mineral owner(s).
After receiving written permission, the governor or other
authorized official of a state may petition the Secretary to assume
responsibilities of conducting audits and related investigation of
Indian oil and gas leases. A state petitioning for a delegation of
authority will have the opportunity to present testimony at a public
hearing within the state.
After the state receives approval of the Secretary's delegation of
authority, it must submit annual audit workplans detailing its audits
and related investigations, annual budgets, and quarterly reimbursement
vouchers. The state shall maintain books and records and provide a
quarterly summary of costs following Department standards, as required
under 30 CFR 229.109.
In addition, 30 CFR 229.101(b), covering the Federal Government's
administration of delegations, states:
(b) A State may enter into a delegation of authority under this
part [229] without affecting a State's ability to enter into a
cooperative agreement under part 228 of this chapter.

Summary

Proprietary information submitted to MMS under this collection is
protected. No items of a sensitive nature are collected. The
opportunity to engage in these programs is voluntary; however, if the
respondents want to receive benefits, the requirement for response is
mandatory.
Frequency of Response: Varies based on the function performed.
Estimated Number and Description of Respondents: 11 states and 7
Indian tribes.
Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 6,194
hours.
We are revising this ICR to include reporting requirements from
part 229 citations that were overlooked in the previous renewal, and we
have adjusted the burden hours accordingly.
The MMS estimates 774 responses each year from the 11 states and 7
Indian tribes. We estimate the total annual burden is 6,194 (4,389 for
states and 1,805 for Indian tribes) reporting and recordkeeping hours.
Due to the complexity of the chart below, we are detailing the number
of burden hours for the states and Indian tribes.
States: We estimate 711 responses (695 from 30 CFR part
227 and 16 from part 229) from 11 states. We estimate the total annual
burden for these responses is 4,389 (4,373 from 30 CFR part 227 and 16
from 30 CFR part 229) reporting and recordkeeping hours due to
historical information.
Indian tribes: We estimate 63 responses (from 30 CFR part
228) from 7 Indian tribes. We estimate the total annual burden for
these responses is 1,805 reporting and recordkeeping hours due to
historical information.
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' Estiamted Annual Burden Hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of
30 CFR section Reporting and recordkeeping requirements Hour burden annual Annual burden
per response responses hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
Part 227--Delegation to States
--------------------------------------------------------------------------------------------------------------------------------------------------------
Delegation Proposals
--------------------------------------------------------------------------------------------------------------------------------------------------------
227.103...................................... What must a State's delegation proposal contain? 200 1 200
If you want MMS to delegate royalty management functions
to you, then you must submit a delegation proposal to
the MMS Associate Diector for Minerals Revenue
Management. MMS will provide you with technical
assistance and information to help you prepare your
delegation proposal. * * *.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Delegation Process
--------------------------------------------------------------------------------------------------------------------------------------------------------
227.107...................................... When will the MMS Director decide whether to approve a Hour burden covered under Sec. 227.103
State's delegation proposal?
The MMS Director will decide whether to approve your
delegation proposal within 90 days after your delegation
proposal is considered complete under Sec. 227.104.
MMS may extend the 90-day period with your written
consent..
227.109...................................... What if the MMS Director denies a State's delegation Hour burden covered under Sec. 227.103.
proposal?
If the MMS Director denies your delegation proposal, MMS
will state the reasons for denial. MMS also will inform
you in writing of the conditions you must meet to
receive approval. You may submit a new delegation
proposal at any time following a denial..

[[Page 39346]]

227.110(a)................................... When and for how long are delegation agreements Hour burden covered under Sec. 227.103.
effective?
(a) Delegation agreements are effective for 3 years from
the date the MMS Director signs the delegation
agreement. However, during the development of the
State's delegation proposal under Sec. 227.108 of this
part, MMS, the delegated State, and any other affected
person will determine an appropriate transition period
for lessees and their designees to modify their systems
to comply with any new requirements under a delegation
agreement * * *..
227.110(b) and (b)(1)........................ (b) You may ask MMS to renew the delegation for an Hour burden covered under Sec. 227.103.
additional 3 years no less than 6 months before your 3-
year delegation agreement expires. You must submit your
renewal request to the MMS Associate Director for
Minerals Revenue Management as follows:
(1) If you do not want to change the terms of your
delegation agreement for the renewal period, you need
only ask to extend your existing agreement for the 3-
year renewal period. * * *
227.110(b)(2)................................ (b)(2) If you want to change the terms of your delegation 15 11 165
agreement for the renewal period, you must submit a new
delegation proposal under this part.
227.110(c)................................... (c) The MMS Director may approve your renewal request Hour burden covered under Sec. 227.103.
only if MMS determines that you are meeting the
requirements of the applicable standards and
regulations. If the MMS Director denies your renewal
request, MMS will state the reasons for denial. MMS also
will inform you in writing of the conditions you must
meet to receive approval. You may submit a new renewal
request any time after denial..
227.110(d)................................... (d) After the 3-year renewal period for your delegation Hour burden covered under Sec. 227.103.
agreement ends, if you wish to continue performing one
or more delegated functions, you must request a new
delegation agreement from MMS under this part. MMS will
schedule a hearing on your request, if MMS determines a
hearing is appropriate. * * *
227.110(e)................................... (e) If you do not request a hearing under paragraphs Hour burden covered under Sec. 227.103.
(b)(1) or (d) of this section, any other affected person
may submit a written request for a hearing under those
paragraphs to the MMS Associate Director for Minerals
Revenue Management.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Existing Delegations
227.111(a) and (b)........................... Do existing delegation agreements remain in effect? Hour burden covered under Sec. 227.103.
This section explains your options if you have a
delegation agreement in effect on the effective date of
this regulation..
--------------------------------------------------------------------------------------------------------------------------------------------------------
(b) If you want to perform royalty management
functions in addition to those authorized
under your existing agreement, you must
request a new delegation agreement under this
part.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Compensation
227.112(d)................................... What compensation will a State receive to perform 4 \1\ 84 336
delegated functions?
You will receive compensation for your costs to perform
each delegated function subject to the following
conditions. * * *
(d) At a minimum, you must provide vouchers detailing
your expenditures quarterly during the fiscal year.
However, you may agree to provide vouchers on a monthly
basis in your delegation agreement. * * *.
227.112(e)................................... (e) You must maintain adequate books and records to Hour burden covered under Sec. 227.200(d).
support your vouchers. * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
States' Responsibilities to Perform Delegated Functions
227.200(a), (b), (c), and (d)................ What are a State's general responsibilities if it accepts 200 11 2,200
a delegation?
For each delegated function you perform, you must: (a) *
* * seek information or guidance from MMS regarding new,
complex, or unique issues. * * *.
(b)(1) * * * Provide complete disclosure of financial
results of activities;.
(2) Maintain correct and accurate records of all mineral-
related transactions and accounts;.
(3) Maintain effective controls and accountability;......
(4) Maintain a system of accounts. * * *.................

[[Page 39347]]

(5) Maintain adequate royalty and production information.
* * *
(c) Assist MMS in meeting the requirements of the
Government Performance and Results Act (GPRA). * * *.
(d) Maintain all records you obtain or create under your
delegated function, such as royalty reports, production
reports, and other related information. * * * You must
maintain such records for at least 7 years. * * *.
227.200(e)................................... (e) Provide reports to MMS about your activities under 3 \2\ 44 132
your delegated functions. * * * At a minimum, you must
provide periodic statistical reports to MMS summarizing
the activities you carried out. * * *
227.200(f)................................... (f) Assist MMS in maintaining adequate reference, 1 250 250
royalty, and production databases. * * *
227.200(h)................................... (h) Help MMS respond to requests for information from 8 10 80
other Federal agencies, Congress, and the public * * *
227.200(g) and 227.301(e).................... What are a State's general responsibilities if it accepts 60 11 660
Sec. 227.200............................... a delegation?
(g) Develop annual work plans. * * *.....................
Sec. 227.301 What are a State's responsibilities if it
performs audits?.
If you perform audits you must * * * (e) Prepare and
submit MMS Audit Work Plans. * * *.
227.400(a)(4) and (a)(6)..................... What functions may a State perform in processing 1 250 250
production reports or royalty reports?
Production reporters or royalty reporters provide
production, sales, and royalty information on mineral
production from leases that must be collected, analyzed,
and corrected..
(a) If you request delegation of either production report
or royalty report processing functions, you must perform
* * *.
(4) Timely transmitting production report or royalty
report data to MMS and other affected Federal agencies.
* * *.
(6) Providing production data or royalty data to MMS and
other affected Federal agencies. * * *
227.400(c)................................... (c) You must provide MMS with a copy of any exceptions 1 12 12
from reporting and payment requirements for marginal
properties and any alternative royalty and payment
requirements for unit agreements and communitization
agreements you approve.
227.401(d)................................... What are a State's responsibilities if it processes Hour burden covered under Sec. 227.400(a)(4)
production reports or royalty reports? and (a)(6).
In processing production reports or royalty reports you
must * * *.
(d) Timely transmit required production or royalty data
to MMS and other affected Federal agencies. * * *.
227.401(e)................................... In processing production reports or royalty reports you Hour burden covered under Sec. 227.200(f).
must * * *
(e) Access well, lease, agreement, and reporter reference
data from MMS, and provide updated information to MMS. *
* *.
227.501(c)................................... What are a State's responsibilities to ensure that Hour burden covered under Sec. 227.400(a)(4)
reporters correct erroneous data? and (a)(6).
(c) Submit accepted and corrected lines to MMS to allow
processing in a timely manner. * * *.
227.601(c)................................... What are a State's responsibilities if it performs 8 11 88
automated verification?
To perform automated verification of production reports
or royalty reports, you must * * *.
(c) Maintain all documentation and logging procedures. *
* *.
227.601(d)................................... (d) Access well, lease, agreement, and production Hour burden covered under Sec. 227.200(f).
reporter or royalty reporter reference data from MMS and
provide updated information to MMS. * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Performance Review
--------------------------------------------------------------------------------------------------------------------------------------------------------
227.801(a)................................... What if a State does not adequately perform a delegated Hour burden covered under Sec. 227.200(e).
function?
If your performance of the delegated function does not
comply with your delegation agreement * * *.
(a) * * * You may ask MMS for an extension of time to
comply with the notice. In your extension request you
must explain why you need more time. * * *.
227.804...................................... How else may a State's delegation agreement terminate? Hour burden covered under Sec. 227.200(e).
You may request MMS to terminate your delegation at any
time by submitting your written notice of intent 6
months prior to the date on which you want to terminate.
* * *.
227.805...................................... How may a State obtain a new delegation agreement after Hour burden covered under Sec. 227.103.
termination?
After your delegation agreement is terminated, you may
apply again for delegation by beginning with the
proposal process. * * *.
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[[Page 39348]]

Subtotal Burden for 30 CFR Part 227 695 4,373
--------------------------------------------------------------------------------------------------------------------------------------------------------
Part 228--Cooperative Activities With States and Indian Tribes
--------------------------------------------------------------------------------------------------------------------------------------------------------
Subpart C--Oil and Gas, Onshore
--------------------------------------------------------------------------------------------------------------------------------------------------------
228.100(a) and (b)........................... Entering into an agreement............................... 200 1 200
(a) * * * Indian tribe may request the Department to
enter into a cooperative agreement by sending a letter
from * * * tribal chairman * * * to the Director of MMS..
(b) The request for an agreement shall be in a format
prescribed by MMS and should include at a minimum the
following information:.
(1) Type of eligible activities to be undertaken.........
(2) Proposed term of the agreement.......................
(3) Evidence that * * * Indian tribe meets, or can meet
by the time the agreement is in effect. * * *.
(4) If the State is proposing to undertake activities on
Indian lands located within the State, a resolution from
the appropriate tribal council indicating their
agreement to delegate to the State responsibilities
under the terms of the cooperative agreement for
activities to be conducted on tribal or allotted land..
228.101(a)................................... Terms of agreement....................................... 15 7 105
(a) Agreements entered into under this part shall be
valid for a period of 3 years and shall be renewable * *
* upon request of * * * Indian tribe. * * *.
228.101(c)................................... (c) * * * Indian tribe may unilaterally terminate an Hour burden covered under Sec. 228.100(a).
agreement by giving a 120-day written notice of intent
to terminate.
228.101(d)................................... (d) * * * Indian tribe will be given 60 days to respond 80 1 80
to the notice of deficiencies and to provide a plan for
correction of those deficiencies. * * *
228.103(a) and (b)........................... Maintenance of records................................... 120 7 840
(a) * * * Indian tribe entering into a cooperative
agreement under this part must retain all records,
reports, working papers, and any backup materials. * * *.
(b) * * * Indian tribe shall maintain all books and
records. * * *.
228.105(a)(1) and (a)(2)..................... Funding of cooperative agreements........................ 60 7 420
(a)(1) The Department may, under the terms of the
cooperative agreement, reimburse * * * Indian tribe up
to 100 percent of the costs of eligible activities.
Eligible activities will be agreed upon annually upon
the submission and approval of a work plan and funding
requirement..
(2) A cooperative agreement may be entered into with * *
* Indian tribe, upon request, without a requirement for
reimbursement of costs by the Department..
228.105(c)................................... (c) * * * Indian tribe shall submit a voucher for 4 \3\40 160
reimbursement of eligible costs incurred within 30 days
of the end of each calendar quarter. * * * Indian tribe
must provide the Department a summary of costs incurred,
for which * * * Indian tribe is seeking reimbursement,
with the voucher.
228.107(b)................................... Eligible cost of activities.............................. Hour burden covered under Sec. 228.100(a)
(b) * * * Each cooperative agreement shall contain and (b).
detailed schedules identifying those activities and
costs which qualify for funding and the procedures,
timing, and mechanics for implementing Federal funding..
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 39349]]

Subtotal Burden for 30 CFR Part 228 63 1,805
--------------------------------------------------------------------------------------------------------------------------------------------------------
PART 229--Delegation to States
--------------------------------------------------------------------------------------------------------------------------------------------------------
Subpart C--Oil and Gas, Onshore
--------------------------------------------------------------------------------------------------------------------------------------------------------
Administration of Delegations
--------------------------------------------------------------------------------------------------------------------------------------------------------
229.100(a)(1) and (a)(2)..................... Authorities and responsibilities subject to delegation... 1 1 1
(a) All or part of the following authorities and
responsibilities of the Secretary under the Act may be
delegated to a State authority:.
(1) Conduct of audits related to oil and gas royalty
payments made to the MMS which are attributable to
leased * * * Indian lands within the State. Delegations
with respect to any Indian lands require the written
permission, subject to the review of the MMS, of the
affected Indian tribe or allottee..
(2) Conduct of investigation related to oil and gas
royalty payments made to the MMS which are attributable
to * * * Indian lands within the State. Delegation with
respect to any Indian lands require the written
permission, subject to the review of the MMS, of the
affected Indian tribe or allottee. No investigation will
be initiated without the specific approval of the MMS. *
* *.
229.101(a) and (d)........................... Petition for delegation.................................. 1 1 1
(a) The governor or other authorized official of any
State which contains * * * Indian oil and gas leases
where the Indian tribe and allottees have given the
State an affirmative indication of their desire for the
State to undertake certain royalty management-related
activities on their lands, may petition the Secretary to
assume responsibilities to conduct audits and related
investigations of royalty related matters affecting * *
* Indian oil and gas leases within the State..
(d) In the event that the Secretary denies the petition,
the Secretary must provide the State with the specific
reasons for denial of the petition. The State will then
have 60 days to either contest or correct specific
deficiencies and to reapply for a delegation of
authority..
229.102(c)................................... Fact-finding and hearings................................ 1 1 1
(c) A State petitioning for a delegation of authority
shall be given the opportunity to present testimony at a
public hearing..
229.103(c)................................... Duration of delegations; termination of delegations...... 1 1 1
(c) A State may terminate a delegation of authority by
giving a 120-day written notice of intent to terminate..
229.105...................................... Evidence of Indian agreement to delegation............... 1 1 1
In the case of a State seeking a delegation of authority
for Indian lands * * * the State petition to the
Secretary must be supported by an appropriate resolution
or resolutions of tribal councils joining the State in
petitioning for delegation and evidence of the agreement
of individual Indian allottees whose lands would be
involved in a delegation. Such evidence shall
specifically speak to having the State assume delegated
responsibility for specific functions related to royalty
management activities..
229.106...................................... Withdrawal of Indian lands from delegated authority...... 1 1 1
If at any time an Indian tribe or an individual Indian
allottee determines that it wishes to withdraw from the
State delegation of authority in relation to its lands,
it may do so by sending a petition of withdrawal to the
State. * * *.
229.109(a)................................... Reimbursement for costs incurred by a State under the 1 1 1
delegation of authority.
(a) The Department of the Interior (DOI) shall reimburse
the State for 100 percent of the direct cost associated
with the activities undertaken under the delegation of
authority. The State shall maintain books and records in
accordance with the standards established by the DOI and
will provide the DOI, on a quarterly basis, a summary of
costs incurred. * * *.
229.109(b)................................... (b) The State shall submit a voucher for reimbursement of 1 1 1
costs incurred within 30 days of the end of each
calendar quarter.
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[[Page 39350]]

Delegation Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
229.120...................................... Obtaining regulatory and policy guidance................. 1 1 1
All activities performed by a State under a delegation
must be in full accord with all Federal laws, rules and
regulations, and Secretarial and agency determinations
and orders relating to the calculation, reporting, and
payment of oil and gas royalties. In those cases when
guidance or interpretations are necessary, the State
will direct written requests for such guidance or
interpretation to the appropriate MMS officials.* * *.
229.121(a), (b), (c), and (d)................ Recordkeeping requirements............................... 1 1 1
(a) The State shall maintain in a safe and secure manner
all records, workpapers, reports, and correspondence
gained or developed as a consequence of audit or
investigative activities conducted under the delegation.
* * *.
(b) The State must maintain in a confidential manner all
data obtained from DOI sources or from payor or company
sources under the delegation. * * *.
(c) All records subject to the requirements of paragraph
(a) must be maintained for a 6-year period measured from
the end of the calendar year in which the records were
created. * * * Upon termination of a delegation, the
State shall, within 90 days from the date of
termination, assemble all records specified in
subsection (a), complete all working paper files in
accordance with 229.124, and transfer such records to
the MMS..
(d) The State shall maintain complete cost records for
the delegation in accordance with generally accepted
accounting principles.* * *.
229.122(a), (b), and (c)..................... Coordination of audit activities......................... 1 1 1
(a) Each State with a delegation of authority shall
submit annually to the MMS an audit workplan
specifically identifying leases, resources, companies,
and payors scheduled for audit. * * * A State may
request changes to its workplan * * * at the end of each
quarter of each fiscal year. All requested changes are
subject to approval by the MMS and must be submitted in
writing..
(b) When a State plans to audit leases of a lessee or
royalty payor for which there is an MMS or OIG resident
audit team, all audit activities must be coordinated
through the MMS or OIG resident supervisor. * * *.
(c) The State shall consult with the MMS and/or OIG
regarding resolution of any coordination problems
encountered during the conduct of delegation activities..
229.123(b)(3)(i)............................. Standards for audit activities........................... 1 1 1
(b)(3) Standards of reporting. (i) Written audit reports
are to be submitted to the appropriate MMS officials at
the end of each field examination..
229.124...................................... Documentation standards.................................. 1 1 1
Every audit performed by a State under a delegation of
authority must meet certain documentation standards. In
particular, detailed workpapers must be developed and
maintained..
229.125(a) and (b)........................... Preparation and issuance of enforcement documents........ 1 1 1
(a) Determinations of additional royalties due resulting
from audit activities conducted under a delegation of
authority must be formally communicated by the State, to
the companies or other payors by an issue letter prior
to any enforcement action. * * *.
(b) After evaluating the company or payor's response to
the issue letter, the State shall draft a demand letter
which will be submitted with supporting workpaper files
to the MMS for appropriate enforcement action. Any
substantive revisions to the demand letter will be
discussed with the State prior to issuance of the
letter.* * *.
229.126(a) and (b)........................... Appeals.................................................. 1 1 1
(a) * * * The State regulatory authority shall, upon the
request of the MMS, provide competent and knowledgeable
staff for testimony, as well as any required
documentation and analyses, in support of the lessor's
position during the appeal process..
(b) An affected State, upon the request of the MMS, shall
provide expert witnesses from their audit staff for
testimony as well as required documentation and analyses
to support the Department's position during the
litigation of court cases arising from denied appeals. *
* *.

[[Page 39351]]

229.127...................................... Reports from States...................................... 1 1 1
The State, acting under the authority of the Secretarial
delegation, shall submit quarterly reports which will
summarize activities carried out by the State during the
preceding quarter of the year under the provisions of
the delegation. * * *.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Subtotal Burden for 30 CFR Part 229 16 16
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Burden............................................................................................................ 774 6,194
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Note: 5 states x 12 monthly vouchers = 60 and 6 states x 4 quarterly vouchers = 24
\2\ Note: 4 quarterly reports x 11 states = 44
\3\ Note: 1 tribe x 12 monthly vouchers = 12 and 7 tribes x 4 quarterly vouchers = 28

Estimated Annual Reporting and Recordkeeping ``Non-hour'' Cost
Burden:
Due to more current information, we have identified no ``non-hour
cost'' burden for this information collection.
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

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