Bonus or Royalty Credits for Relinquishing Certain Leases Offshore Florida, 6073-6080 [E8-1860]

Download as PDF sroberts on PROD1PC70 with PROPOSALS Federal Register / Vol. 73, No. 22 / Friday, February 1, 2008 / Proposed Rules materials, to the Office of the Director by overnight courier, for delivery the next business day. In order to be timely, a request for review shall be received at the Office of the Director no later than 20 calendar days from the date of the notice to the agency. (k) The United States Trustee shall have 30 calendar days from the date of the agency’s request for review to submit to the Director a written response regarding the matters raised in the agency’s request for review. The United States Trustee shall provide a copy of this response to the agency by overnight courier, for delivery the next business day. (l) The Director may seek additional information from any party in the manner and to the extent the Director deems appropriate. (m) In reviewing the decision to deny an agency’s application or remove an agency from the approved list, the Director shall determine: (1) Whether the denial or removal decision is supported by the record; and (2) Whether the denial or removal decision constitutes an appropriate exercise of discretion. (n) Except as provided in paragraph (o) of this section, the Director shall issue a written final decision no later than 60 calendar days from the receipt of the agency’s request for review, unless the agency agrees to a longer period of time or the Director extends the deadline. The Director’s final decision on the agency’s request for review shall constitute final agency action. (o) Whenever the United States Trustee provides under paragraph (i) of this section that a decision to remove an agency from the approved list is effective immediately, the Director shall issue a written decision no later than 15 calender days from the receipt of the agency’s request for review, unless the agency agrees to a longer period of time, which decision shall: (1) Be limited to deciding whether the determination that the removal decision should take effect immediately was supported by the record and an appropriate exercise of discretion; (2) Constitute final agency action only on the issue of whether the removal decision should take effect immediately; and (3) Not constitute final agency action on the ultimate issue of whether the agency should be removed from the approved list; after issuing the decision, the Director shall issue a written final decision by the deadline set forth in paragraph (n) of this section. (p) In reaching a decision under paragraphs (n) and (o) of this section, VerDate Aug<31>2005 19:34 Jan 31, 2008 Jkt 214001 the Director may specify a person to act as a reviewing official. The reviewing official’s duties shall be specified by the Director on a case-by-case basis, and may include reviewing the record, obtaining additional information from the participants, providing the Director with written recommendations, and such other duties as the Director shall prescribe in a particular case. (q) An agency that files a request for review shall bear its own costs and expenses, including counsel fees. (r) When a decision to remove an agency from the approved list takes effect, the agency shall: (1) Immediately cease providing counseling services to clients and shall not agree to provide counseling services to prospective clients; (2) No later than 3 business days after the date of removal, issue all certificates to all clients who completed counseling services prior to the agency’s removal from the approved list; and (3) No later than 3 business days after the date of removal, return all fees to clients and prospective clients who had paid for counseling services, but had not completely received them. (s) An agency must exhaust all administrative remedies before seeking redress in any court of competent jurisdiction. Dated: January 18, 2008. Clifford J. White III, Director, Executive Office for United States Trustees. [FR Doc. E8–1451 Filed 1–31–08; 8:45 am] BILLING CODE 4410–40–P DEPARTMENT OF THE INTERIOR Minerals Management Service 30 CFR Part 256 [Docket ID: MMS–2007–OMM–0064] RIN 1010–AD44 Bonus or Royalty Credits for Relinquishing Certain Leases Offshore Florida Minerals Management Service (MMS), Interior. ACTION: Proposed rule. AGENCY: SUMMARY: The MMS proposes to amend its regulations for oil and gas leases on the Outer Continental Shelf to implement a mandate in the Gulf of Mexico Energy Security Act of 2006. This proposed rule would (1) provide a credit to lessees who relinquish certain eligible leases in the Gulf of Mexico; (2) define eligible leases as those within 125 miles of the Florida coast in the PO 00000 Frm 00018 Fmt 4702 Sfmt 4702 6073 Eastern Planning Area and certain leases within 100 miles of the Florida coast in the Central Planning Area; and (3) allow lessees to use the credits in lieu of monetary payment for either a lease bonus bid or royalty due on oil and gas production from most other leases in the Gulf of Mexico or to transfer the credits to other Gulf of Mexico lessees for their use. DATES: Submit comments by April 1, 2008. The MMS may not fully consider comments received after this date. Submit comments to the Office of Management and Budget on the information collection burden in this proposed rule by March 3, 2008. FOR FURTHER INFORMATION CONTACT: Marshall Rose, Chief, Economics Division, at (703) 787–1536. ADDRESSES: You may submit comments on the rulemaking by any of the following methods. Please use the Regulation Identifier Number (RIN) 1010–AD44 as an identifier in your message. See also Public Availability of Comments under Procedural Matters. • Federal eRulemaking Portal: http:// www.regulations.gov. Select ‘‘Minerals Management Service’’ from the agency drop-down menu, then click ‘‘submit.’’ In the Docket ID column, select MMS– 2007–OMM–0064 to submit public comments and to view supporting and related materials available for this rulemaking. Information on using Regulations.gov, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site’s ‘‘User Tips’’ link. All comments will be posted to the docket. • Mail or hand-carry comments to the Department of the Interior; Minerals Management Service; Attention: Regulations and Standards Branch (RSB); 381 Elden Street, MS–4024, Herndon, Virginia 20170–4817. Please reference ‘‘Bonus or Royalty Credits for Relinquishing Certain Leases Offshore Florida, 1010–AD44’’ in your comments and include your name and return address. • Send comments on the information collection in this rule to: Interior Desk Officer 1010–AD44, Office of Management and Budget; 202–395–6566 (fax); e-mail: oira_docket@omb.eop.gov. Please also send a copy to MMS. SUPPLEMENTARY INFORMATION: Background and Summary of the Proposed Rule Congress passed, and on December 20, 2006, the President signed, the Gulf of Mexico Energy Security Act of 2006 (GOMESA), Public Law No. 109–432. E:\FR\FM\01FEP1.SGM 01FEP1 6074 Federal Register / Vol. 73, No. 22 / Friday, February 1, 2008 / Proposed Rules Section 104(c) of that statute authorizes the Secretary of the Interior (Secretary) to issue a bonus or royalty credit for the exchange of certain leases located offshore of the State of Florida. The statute defines leases eligible for the credit as those in existence on the enactment date of the GOMESA and located both within specified Outer Continental Shelf (OCS) planning areas and distances from the Florida coastline. The statute sets the size of the credit as equal to the bonus and rental paid for the relinquished eligible lease, and limits its use to payments by lessees of bonuses and royalties for leases in the Gulf of Mexico (GOM) not subject to revenue sharing under section 8(g) of the Outer Continental Shelf Lands Act (OCSLA) (43 U.S.C. 1337(g)). Finally, the statute mandates a regulatory process for notifying the Secretary of a lessee’s decision to exchange a lease for a credit, issuing the credit, allocating the credit among multiple lease owners, and transferring the credit to other parties. To implement section 104(c), MMS proposes to add a new subpart N to 30 CFR part 256. Part 256 deals with OCS lease administration, including transfer and termination of a lease. After briefly reviewing the credit issuing process, the following discussion explains how MMS proposes to handle redemption of the credits. Issuing Credits Section 104, together with the definitions in section 102(1), (4), and (5), identifies the offshore area in which existing leases are located to be eligible to be exchanged for the credit. Therein, reference is made to parts of the Central Planning Area (CPA) and the Eastern Planning Area, as designated in the Draft Proposed Program Outer Continental Shelf Oil and Gas Leasing Program 2007–2012, dated February 2006. However, the area does not include all of the CPA in the area eligible for the credits. The GOMESA limits the included part of the CPA to the portion of the CPA within 100 miles of the coastline of the State of Florida, and to the area that lies either within a particular area shown on a map that MMS published 10 years ago, or, east of a particular coordinate line on the Pensacola Official Protraction Diagram. The MMS previously delineated the area in which leases are eligible for the credit using Official Protraction Diagram (OPD) designations. The OPD, in conjunction with the OCS block numbers, uniquely identifies each OCS block by a designated numbering system. The planning area boundaries that were in effect when MMS published the referenced maps coincided with the OPD boundaries. After recent changes MMS made in the boundary between its Eastern, Central, and Western Planning Areas for the GOM, the new planning area boundaries do not coincide with the pre-existing OPD boundaries. Thus, definitions added to §§ 256.5 and 256.90 propose to use OPD boundaries to define the western extent of the eligible area. The northern and eastern extent of the eligible area is the seaward boundary of the State of Florida. The GOMESA defines the southern extent of the eligible area by reference to the distance from the Florida coastline. Parts of three OPDs (Desoto Canyon, Destin Dome, and Pensacola) are both in the eligible part of the new CPA and within the requisite 100 miles of the Florida coastline. Other parts of these three OPDs, as well as other OPDs, are in the new Eastern planning area and within the requisite 125 miles of the Florida coastline. These areas contain a total of 79 still active leases as of the end of calendar year 2006. The GOMESA makes all of these leases that were in effect on December 20, 2006, the date of enactment of the GOMESA, eligible for this exchange program. The MMS seeks comments on whether this interpretation of eligibility for the credits based on location and lease status complies with the requirements specified in GOMESA. Section 256.91 proposes to grant credits equal to the original bonus paid for the relinquished lease plus the cumulative rental paid on that lease since issuance. Because the GOMESA explicitly values the credits as equal only to the sum of these two costs, no authority exists to include reimbursement for any other costs. Thus, MMS will not credit or value any exploration costs incurred in connection with eligible leases for purposes of issuing credits; nor will MMS include time value of money (interest) in calculating the amount of a credit. The MMS estimates the aggregate value of credits available under the statutory formula as slightly more than $60 million. The following table lists each lease identified under the proposed interpretation of GOMESA that is eligible for the credit and the amount of the credit. MMS seeks comments about whether any variations exist between the data in this table and the information held by the lease owners. LEASES AND AMOUNTS ELIGIBLE FOR BONUS OR ROYALTY CREDIT Lease effective date sroberts on PROD1PC70 with PROPOSALS Lease No. G06390 G06401 G06402 G06406 G06407 G06408 G06409 G06440 G06464 G06469 G06470 G06474 G06475 G06476 G06477 G08308 G08309 G08310 G08333 G08334 G08346 ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ VerDate Aug<31>2005 19:34 Jan 31, 2008 Jkt 214001 PO 00000 Frm 00019 Fmt 4702 Sfmt 4702 2/1/1984 2/1/1984 2/1/1984 2/1/1984 2/1/1984 2/1/1984 2/1/1984 2/1/1984 3/1/1984 2/1/1984 2/1/1984 2/1/1984 2/1/1984 2/1/1984 2/1/1984 3/1/1987 3/1/1987 3/1/1987 2/1/1988 2/1/1988 2/1/1988 Bid amount $957,000 1,103,450 1,106,780 1,607,800 1,308,800 1,106,430 1,213,500 918,500 1,107,500 1,613,500 1,107,500 1,610,800 1,201,700 1,107,500 908,700 2,877,000 2,325,000 1,165,000 1,379,000 1,379,000 1,355,000 E:\FR\FM\01FEP1.SGM 01FEP1 Rental paid to 12/31/2006 $86,400 51,265 85,825 69,120 311,040 103,105 103,105 82,032 57,762 75,038 75,038 75,038 75,038 75,038 75,038 77,866 17,173 17,173 71,854 71,854 67,593 Total credit $1,043,400 1,154,715 1,192,605 1,676,920 1,619,840 1,209,535 1,316,605 1,000,532 1,165,262 1,688,538 1,182,538 1,685,838 1,276,738 1,182,538 983,738 2,954,866 2,342,173 1,182,173 1,450,854 1,450,854 1,422,593 Federal Register / Vol. 73, No. 22 / Friday, February 1, 2008 / Proposed Rules 6075 LEASES AND AMOUNTS ELIGIBLE FOR BONUS OR ROYALTY CREDIT—Continued Lease effective date Lease No. Rental paid to 12/31/2006 Total credit ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ 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............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ ............................................................................................................ 8/1/1986 8/1/1986 8/1/1986 8/1/1986 8/1/1986 8/1/1986 8/1/1986 8/1/1986 4/1/1990 4/1/1990 4/1/1990 4/1/1990 4/1/1990 11/1/1989 11/1/1989 4/1/1990 11/1/1989 6/1/1990 6/1/1990 11/1/1989 11/1/1989 6/1/1990 6/1/1990 6/1/1990 6/1/1990 6/1/1990 6/1/1990 11/1/1989 11/1/1989 11/1/1989 11/1/1989 11/1/1989 11/1/1989 10/1/1990 10/1/1990 10/1/1990 10/1/1990 10/1/1990 10/1/1990 10/1/1990 10/1/1990 10/1/1990 10/1/1990 10/1/1990 10/1/1990 10/1/1990 10/1/1990 10/1/1990 10/1/1990 10/1/1990 10/1/1990 10/1/1990 10/1/1990 10/1/1990 10/1/1990 10/1/1990 10/1/1990 10/1/1990 1,837,000 944,000 3,276,000 2,377,000 1,857,000 944,000 1,363,000 1,117,000 157,000 145,000 149,000 187,000 209,000 150,550 150,550 153,000 306,200 150,550 150,550 218,880 155,300 145,000 938,500 330,900 900,600 245,200 376,500 2,102,400 910,080 155,200 167,200 184,500 560,600 146,000 146,000 146,000 153,000 153,000 145,000 168,000 153,000 168,000 148,500 156,100 181,500 148,700 159,200 196,500 151,700 157,500 147,300 147,300 163,500 195,400 192,600 157,600 145,000 158,000 59,107 59,107 59,107 59,107 59,107 59,107 59,107 59,107 52,100 52,100 52,100 52,100 52,100 51,899 51,899 52,100 64,811 37,199 37,199 115,445 41,827 47,330 41,649 41,649 41,649 41,649 41,649 115,445 115,445 41,747 76,387 80,743 80,743 61,995 61,995 61,995 61,995 61,995 61,995 61,995 61,995 61,995 41,922 41,922 41,922 41,922 41,922 41,922 41,922 41,922 41,922 41,922 41,922 41,922 41,922 41,922 61,995 61,995 1,896,107 1,003,107 3,335,107 2,436,107 1,916,107 1,003,107 1,422,107 1,176,107 209,100 197,100 201,100 239,100 261,100 202,449 202,449 205,100 371,011 187,749 187,749 334,325 197,127 192,330 980,149 372,549 942,249 286,849 418,149 2,217,845 1,025,525 196,947 243,587 265,243 641,343 207,995 207,995 207,995 214,995 214,995 206,995 229,995 214,995 229,995 190,422 198,022 223,422 190,622 201,122 238,422 193,622 199,422 189,222 189,222 205,422 237,322 234,522 199,522 206,995 219,995 79 ..................................................................................................................... sroberts on PROD1PC70 with PROPOSALS G08361 G08362 G08363 G08364 G08365 G08366 G08367 G08368 G10404 G10405 G10408 G10409 G10410 G10413 G10414 G10415 G10417 G10426 G10427 G10428 G10429 G10430 G10431 G10432 G10433 G10434 G10435 G10436 G10437 G10438 G10439 G10440 G10443 G10446 G10447 G10448 G10449 G10450 G10451 G10452 G10453 G10454 G10455 G10456 G10459 G10460 G10461 G10462 G10463 G10464 G10465 G10466 G10471 G10472 G10473 G10477 G10484 G10485 Bid amount ........................ $55,458,120 4,944,064 60,402,184 The process proposed by § 256.92 for claiming a credit would begin when all parties holding record title interests in an eligible lease notify the Regional Supervisor for Leasing and Environment in the MMS GOM Regional Office of the decision to exchange the lease. Parties VerDate Aug<31>2005 19:34 Jan 31, 2008 Jkt 214001 holding record title interest in an eligible lease are permitted up to 1 year from the effective date of the final rule to apply for these credits. After that date, MMS will no longer accept applications for the credits provided for in this rule. In addition to a request for PO 00000 Frm 00020 Fmt 4702 Sfmt 4702 a credit, the notification would include: (1) The name of a contact for each record title holder; (2) the percentage record title interest of each owner; (3) a list of the bonus and rental payments made by, or on behalf of, all current owners of the lease; and (4) the form E:\FR\FM\01FEP1.SGM 01FEP1 6076 Federal Register / Vol. 73, No. 22 / Friday, February 1, 2008 / Proposed Rules sroberts on PROD1PC70 with PROPOSALS (Form MMS–152, Relinquishment of Federal Oil and Gas Lease) necessary to execute relinquishment according to § 256.76. The MMS would confirm the percentage interest and payments claimed by the current owners and add any bonus bid or rental payments made by prior owners to determine the credit amount. Once the adjudication unit in the MMS GOM Region has approved the exchange, the MMS’ Minerals Revenue Management (MRM) office would post the credits in the appropriate company payor accounts of the record title interest owners. The credit would become available when MMS sends a written certification to the record title interest owners of an eligible lease that this lease has qualified for a credit of a specific amount. In the case of multiple record title interest owners of an eligible lease, § 256.93 proposes that MMS would allocate the credit to each record title interest owner based on its percentage of total ownership interest in the lease at the time the owners submit to MMS the request to exchange the lease. The MMS recognizes that the original lessee(s) would have made bonus payments. If the original lessee sells its record title interest in a lease, the financial terms of the sale will have compensated the original lessee, in some manner satisfactory to it, for the bonus payment it made for its record title interest. Thus, the current record title interest owners made the timely and legally binding investment to acquire and hold the right to explore for and produce the oil and gas that may underlie the seabed on that lease. Therefore, MMS would allocate current record title interest owners the credit usable to acquire an interest in another lease or to pay royalties on production from another lease. Moreover, if the terms of any particular operating rights assignment imply any right or interest in that credit on the part of the assignee, then the current record title holder and the assignee may resolve that issue between themselves. Redeeming Credits Section 256.94(a) proposes to authorize current record title interest owners to redeem these credits as either payment of bonus bids or royalties paid in value. The notice MMS sends certifying that a lease has qualified for a credit would include the amount of the credit and instructions on how to apply the credit, either to a bonus payment due on a successful bid for new leases or to royalties reported due on Form MMS 2014—Report of Sales and Royalty Remittance for other leases. VerDate Aug<31>2005 19:34 Jan 31, 2008 Jkt 214001 Under section 104(c)(3) of the statute, the credit may not be used in lieu of payments due under a lease subject to the revenue distribution provisions of section 8(g) of the OCSLA (43 U.S.C. 1337(g)). Under section 8(g)(2), the Secretary pays 27 percent of bonuses, rents, royalties, and other moneys collected from leases lying within 3 nautical miles of the seaward boundary of a coastal state to that state (or 27 percent of the portion of such revenues corresponding to the portion of the lease that lies within 3 nautical miles of the state’s seaward boundary). Proposed § 256.94(a) contains this restriction. Provisions in section 105 of the GOMESA create certain other revenue distribution requirements in addition to the 8(g) provisions. Since Congress certainly knew of, but did not include, these newer revenue distribution programs in this exclusion, this proposal allows a bonus or royalty credit to be used for payments due from leases subject to these newer revenue distribution provisions. Because using a credit to pay a bonus or royalty in lieu of payment in cash results in the United States receiving less money than if the bidder or lessee paid in cash, it necessarily follows that any distribution of royalty or bonus payments to a state or coastal political subdivision under GOMESA section 105 would result in a corresponding reduction from what it would have been had the entire payment been made in cash. However, MMS projects that the financial impact of section 105 on the coastal states during fiscal years 2007 through 2016 would be very limited. In that time period, under the definition of ‘‘qualified Outer Continental Shelf revenues’’ in GOMESA section 102(9), section 105’s distribution requirements apply only to revenues derived from new leases issued after GOMESA’s enactment in the portion of the 181 Area located in the Eastern Planning Area and to the 181 South Area. Production and royalty from such leases will not occur anytime soon. Further, MMS allocates the portion of qualified Outer Continental Shelf revenues paid to Gulf producing states between those states based on an inverse distance formula. Therefore, any financial impact on a particular state of a reduction in a particular bonus payment for a new lease in the subject areas because of use of a bonus credit should be very minimal. In fact, lessees who obtain credits will more likely apply them to royalties due under other existing leases with no revenue distribution to nonFederal recipients, or transfer them to other parties for that purpose, thus further reducing the financial impact to PO 00000 Frm 00021 Fmt 4702 Sfmt 4702 states and localities from this treatment of credit. The GOMESA limits the credit to monetary payments. The MMS makes explicit in proposed § 256.94(b) that the credit does not apply to royalty-in-kind (RIK) deliveries. Section 102 of the statute defines the credit as follows: The term ‘‘bonus or royalty credit’’ means a legal instrument or other written documentation, or an entry in an account managed by the Secretary, that may be used in lieu of any other monetary [emphasis added] payment for— (A) a bonus bid for a lease on the outer Continental Shelf; or (B) a royalty due on oil or gas production from any lease located on the outer Continental Shelf. The RIK deliveries are not monetary payments. Since the lessee fulfills its royalty obligations by delivering a volume of oil and gas to MMS, the lessee pays no money when paying the RIK. Thus, a lessee cannot use a monetary credit in lieu of delivering RIK. Under current circumstances, exclusion of RIK would confine the application of a royalty credit under the proposed rule to about 30 percent of the roughly $4 billion in royalty generated annually by GOM producers. Recent royalty collections from 8(g) sources in the GOM total about 3 percent of all oil and gas royalties collected offshore in the GOM. Thus, annual royalties currently paid in cash, to which credits under this proposed rule may apply, total over $1 billion under leases on tracts in the GOM lying outside the ‘‘8(g) zone’’—more than 16 times the total value of credits that could be issued under this rule, even if no credits were applied to bonus payments in future lease sales. Section 256.94(c) proposes to address credits that remain unused after 5 years from the date MMS issues the credits. The section would state that if any credit remains unused after 5 years from the date MMS issued the credit, the MMS reserves the right to apply the remaining credit to the credit holder’s ongoing obligations at MMS’s discretion. Section 256.95 proposes to allow current record title interest owners to transfer credits to other parties. The transferee of the credit could use the full face amount of the credit. (Any discount in a payment from the transferee to the transferor of the credit would be a matter solely between those two parties.) This attribute of the credit would largely mitigate any perceived limitation imposed by restricting use of the credit to future bonus or royalty invalue due. As indicated, the expected aggregate size of the credits created E:\FR\FM\01FEP1.SGM 01FEP1 Federal Register / Vol. 73, No. 22 / Friday, February 1, 2008 / Proposed Rules under section 104(c) constitutes only about 6 percent of the royalty in-value collected annually in the GOM. Thus, an ample market should exist for companies that wish to transfer rather than directly use credits they may receive. When MMS receives the necessary transfer information, MRM will adjust the financial accounts of the transferor and transferee accordingly. The credit becomes available when the MMS sends a written confirmation to the transferee. Rather than create a standard form that must be executed to effect a credit transfer, this rule proposes to rely on a ‘‘Letter of Agreement’’ signed by an authorized official of both the transferor and transferee companies to transfer a bonus or royalty credit. A more formal process does not appear warranted by the few companies involved, all of which have other Gulf of Mexico activities, and the size of the credits relative to authorized uses. The MMS seeks comments on whether a high volume of transfers would warrant a more formal credit transfer process like that used for lease assignments. To summarize, this proposed rule would offer credits equal to past bonus and rental payments made in connection with 79 offshore leases near Florida in exchange for relinquishment of these leases. The necessary restrictions that MMS proposes for the use of those credits would not compromise their value because the credits would have no expiration date, are transferable, and in aggregate are quite small in magnitude relative to the bonus or royalty-in-value payment obligations to which they can be applied. The credits may be used to meet future bonus or royalty-in-value payments for leases in the GOM outside the 8(g) zone. Procedural Matters sroberts on PROD1PC70 with PROPOSALS Regulatory Planning and Review (Executive Order (E.O.) 12866) This proposed rule is not a significant rule as determined by the Office of Management and Budget (OMB) and is not subject to review under E.O. 12866. (1) This proposed rule would not have an annual effect of $100 million or more on the economy. It would not adversely affect in a material way the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities. The total value of the credit is defined by statute as bonuses and rental paid on the leases in the eligible area. The MMS records show 79 leases are eligible. Total bonuses and VerDate Aug<31>2005 19:34 Jan 31, 2008 Jkt 214001 6077 rentals paid in connection with these leases is about $60 million. (2) This proposed rule would not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency because the credit is confined to leases in Federal offshore waters that lie outside the coastal jurisdiction of State and other local agencies. (3) This proposed rule would not alter the budgetary effects of entitlements, grants, user fees or loan programs, or the rights or obligations of their recipients. (4) This proposed rule would not raise novel legal or policy issues. The proposed rule would implement a statutory program that exchanges a credit against future obligations for the return of old, largely inactive leases in a sensitive area. offshore lessees and operators, including those that are classified as small businesses. Your comments are important. The Small Business and Agriculture Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards were established to receive comments from small businesses about Federal agency enforcement actions. The Ombudsman will annually evaluate the enforcement activities and rate each agency’s responsiveness to small business. If you wish to comment on the actions of MMS, call 1–888–734–3247. You may comment to the Small Business Administration without fear of retaliation. Disciplinary action for retaliation by an MMS employee may include suspension or termination from employment with the DOI. Regulatory Flexibility Act The Department of the Interior certifies that this proposed rule would not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). This proposed rule applies to the lessees holding record title interests in the 79 offshore leases located near the coastline of the State of Florida. These lessees fall under the Small Business Administration’s North American Industry Classification System (NAICS) code 211111, Crude Petroleum and Natural Gas Extraction. Under this NAICS code, companies with less than 500 employees are considered small businesses. Only one of the current record title owners of these 79 leases has less than 500 employees. Moreover, this rule provides a clear benefit to the lessees. It specifies a valuable credit and a simple process for claiming a benefit for relinquishing a lease which the owners have had trouble operating due to access limitations. This proposed rule would create a relatively small amount of total credits in exchange for certain leases through a relinquishment process that all OCS lessees are accustomed to using. The credits could be used to fulfill any of a relatively large pool of routine bonus or royalty in-value OCS obligations under leases located in the GOM. The credits also would be freely transferable or assignable, and would have no time limit on use. Thus, should a small entity obtain a credit through a transfer, it would be able to use the credit for routine obligations or it could exchange the credit for approximately equivalent value in a potentially large market of other users. The provisions of this proposed rule would not have a significant adverse economic effect on Small Business Regulatory Enforcement Fairness Act This proposed rule is not a major rule under the Small Business Regulatory Enforcement Fairness Act (5 U.S.C. 804(2)). This proposed rule: a. Would not have an annual effect on the economy of $100 million or more. This proposed rule would offer credits worth approximately $60 million for the exchange of 79 leases in a sensitive area. Not all companies may choose to relinquish their leases for the credit offered. Even if all the credits were redeemed in 1 year, it would not have an annual effect on the economy of $100 million. b. Would not cause a major increase in costs or prices for consumers, individual industries, Federal, State, local government agencies, or geographic regions. The credit represents only a transfer of previous payments back to lessees. The relatively small amount returned by these credits would have little effect on markets, agencies, or regions. c. Would not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. Productive activities have been restricted on the leases that would be returned, and the monetary credit received in exchange would be too small to have a perceptible effect. PO 00000 Frm 00022 Fmt 4702 Sfmt 4702 Unfunded Mandates Reform Act This proposed rule would not impose an unfunded mandate on State, local, or tribal governments or the private sector of more than $100 million per year. The proposed rule would not have a significant or unique effect on State, local, or tribal governments or the private sector. A statement containing E:\FR\FM\01FEP1.SGM 01FEP1 6078 Federal Register / Vol. 73, No. 22 / Friday, February 1, 2008 / Proposed Rules the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq.) is not required. tribes. There are no Indian or tribal lands on the OCS. Takings Implication Assessment (E.O. 12630) This proposed rule contains a collection of information that will be submitted to OMB for review and approval under § 3507(d) of the PRA. This proposed rule also refers to, but does not change, information collection burdens already covered and approved under OMB Control Number 1010–0006. As part of our continuing effort to reduce paperwork and respondent burdens, MMS invites the public and other Federal agencies to comment on any aspect of the reporting and recordkeeping burden. You may submit your comments on the information collection aspects of this rule 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– AD44. Send a copy of your comments to the Regulations and Standards Branch (RSB), Attn: Comments; 381 Elden Street, MS–4024; Herndon, Virginia 20170–4817. Please reference ‘‘Bonus or Royalty Credits for Relinquishing Certain Leases Offshore Florida’’—AD44 in your comments. You may obtain a copy of our submission to OMB for the new collection of information by contacting the Bureau’s Information Collection Clearance Officer at (202) 208–7744. The PRA 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. The OMB is required to make a decision concerning the collection of information contained in these proposed regulations between 30 to 60 days after publication of this document in the Federal Register. Therefore, a comment to OMB is best assured of having its full effect Paperwork Reduction Act (PRA) of 1995 Under the criteria in E.O. 12630, this proposed rule does not have significant takings implications. The proposed rule is not a governmental action capable of interference with constitutionally protected property rights. A takings implication assessment is not required. Federalism (E.O. 13132) Under the criteria in E.O. 13132, this proposed rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. As noted above, the potential revenue sharing effects are excluded either explicitly or implicitly by virtue of the treatment of the expected credit redemptions. This proposed rule would not substantially and directly affect the relationship between the Federal and State governments. To the extent that State and local governments have a role in OCS activities, this proposed rule would not affect that role. A Federalism Assessment is not required. Civil Justice Reform (E.O. 12988) This rule complies with the requirements of E.O. 12988. Specifically, this rule: (a) Meets the criteria of section 3(a) requiring that all regulations be reviewed to eliminate errors and ambiguity and be written to minimize litigation; and (b) Meets the criteria of section 3(b)(2) requiring that all regulations be written in clear language and contain clear legal standards. Consultation With Indian Tribes (E.O. 13175) Under the criteria in E.O. 13175, we have evaluated this proposed rule and determined that it has no potential effects on federally recognized Indian Reporting & recordkeeping requirement 92(a) ................................ Request a bonus or royalty credit and submit supporting documentation. 92(a)(5) ............................ Submit a request to relinquish lease according to § 256.76 ......... 95 ..................................... sroberts on PROD1PC70 with PROPOSALS Citation 30 CFR part 256 subpart N if OMB received it by March 3, 2008. This does not affect the deadline for the public to comment to MMS on the proposed regulations. The title of the information collection is ‘‘30 CFR Part 256, Bonus or Royalty Credits for Relinquishing Certain Leases Offshore Florida.’’ Respondents are those from the approximately 130 Federal oil and gas lessees who may earn or trade for the bonus or royalty credit. This rulemaking affects those companies that own record title interests in 79 leases. Responses to this collection are required to obtain benefits. The frequency of response is on occasion. The information collection (IC) does not include questions of a sensitive nature. The IC involves requests for a bonus or royalty credit in exchange for relinquishing certain leases or the transfer of such credit to another entity. The MMS will use this information to track the possession and redemption of these special bonus or royalty credits. The OMB approved the collection of information required by the current 30 CFR part 256 regulations under OMB Control Number 1010–0006 (17,058 burden hours, expiration 5/31/2010). When the final regulations take effect, MMS will consolidate the information collection burden approved for this proposed rulemaking into the primary 30 CFR part 256 information collection under 1010–0006. The following table shows the two new paperwork burden estimates for this proposed rulemaking. We estimate a total of 45 burden hours, including the time for gathering the information and submitting the request to MMS for review. It should be noted that this rulemaking concerns only 79 current leases and will not affect future leases. Therefore, the associated information collection would be a one-time only burden should respondents holding eligible leases elect to take advantage of the bonus or royalty credits for relinquishing these leases. Request approval to transfer bonus or credit to another party with supporting information. Average No. of annual responses Hour burden 1 1 Jkt 214001 PO 00000 Frm 00023 Fmt 4702 Sfmt 4702 E:\FR\FM\01FEP1.SGM 01FEP1 15 15 45 * 240 hours for this requirement are already approved under 1010–0006. 19:34 Jan 31, 2008 30 Burden currently approved under 1010–0006.* TOTAL BURDEN VerDate Aug<31>2005 30 Annual burden hours 45 Federal Register / Vol. 73, No. 22 / Friday, February 1, 2008 / Proposed Rules sroberts on PROD1PC70 with PROPOSALS The MMS specifically solicits comments on the following questions: (a) Is the proposed collection of information necessary for MMS to properly perform its functions, and will it be useful? (b) Are the estimates of the burden hours of the proposed collection reasonable? (c) Do you have any suggestions that would enhance the quality, clarity, or usefulness of the information to be collected? (d) Is there a way to minimize the information collection burden on those who are to respond, including the use of appropriate automated electronic, mechanical, or other forms of information technology? In addition, the PRA requires agencies to estimate the total annual reporting and recordkeeping ‘‘non-hour cost’’ burden resulting from the collection of information. We have not identified any, and we solicit your comments on this item. For reporting and recordkeeping only, your response should split the cost estimate into two components: (a) Total capital and startup cost component and (b) annual operation, maintenance, and purchase of services component. Your estimates should consider the costs to generate, maintain, and disclose or provide the information. You should describe the methods you use to estimate major cost factors, including system and technology acquisition, expected useful life of capital equipment, discount rate(s), and the period over which you incur costs. Capital and start-up costs include, among other items, computers and software you purchase to prepare for collecting information; monitoring, sampling, drilling, and testing equipment; and record storage facilities. Generally, your estimates should not include equipment or services purchased: (1) Before October 1, 1995; (2) To comply with requirements not associated with the information collection; (3) For reasons other than to provide information or keep records for the Government; or (4) As part of customary and usual business or private practices. National Environmental Policy Act (NEPA) of 1969 We have analyzed this proposed rule in accordance with the criteria of the National Environmental Policy Act and the Department Manual at 516 DM. We determined this proposed rule does not constitute a major Federal action significantly affecting the quality of the human environment. This proposed rule VerDate Aug<31>2005 19:34 Jan 31, 2008 Jkt 214001 deals with financial matters and has no direct effect on MMS decisions on environmental activities; hence, an environmental impact statement is not required. Pursuant to Department Manual 516 DM 2.3A (2), Section 1.10 of 516 DM 2, Appendix 1 excludes from documentation in an environmental assessment or impact statement ‘‘policies, directives, regulations and guidelines of an administrative, financial, legal, technical or procedural nature; or the environmental effects of which are too broad, speculative or conjectural to lend themselves to meaningful analysis and will be subject later to the NEPA process, either collectively or case-by-case.’’ Section 1.3 of the same appendix clarifies that royalties and audits are considered routine financial transactions that are subject to categorical exclusion from the NEPA process. No exception to the categorical exclusion applies. Data Quality Act In developing this rule we did not conduct or use a study, experiment, or survey requiring peer review under the Data Quality Act (Pub. L. 106–554). 6079 of the methods listed in the ADDRESSES section. To better help us revise the rule, your comments should be as specific as possible. For example, you should tell us the numbers of the sections or paragraphs that you find unclear, which sections or sentences are too long, the sections where you feel lists or tables would be useful, etc. List of Subjects in 30 CFR Part 256 Administrative practice and procedure, Continental shelf, Government contracts, Mineral royalties, Oil and gas exploration, Public lands—mineral resources, Reporting and recordkeeping requirements. Dated: January 16, 2008. C. Stephen Allred, Assistant Secretary—Land and Minerals Management. For the reasons stated in the preamble, the Minerals Management Service (MMS) proposes to amend 30 CFR part 256 as follows: PART 256—LEASING OF SULPHUR OR OIL AND GAS IN THE OUTER CONTINENTIAL SHELF Effects on the Energy Supply (E.O. 13211) 1. The authority citation for part 256 is revised to read as follows: This rule is not a significant energy action under the definition in E.O. 13211. A Statement of Energy Effects is not required. Authority: 31 U.S.C. 9701, 42 U.S.C. 6213, 43 U.S.C. 1334, P. L. No. 109–432. Public Availability of Comments Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so. Clarity of This Regulation We are required by E.O. 12866, E.O. 12988, and by the Presidential Memorandum of June 1, 1998, to write all rules in plain language. This means that each rule we publish must: (a) Be logically organized; (b) Use the active voice to address readers directly; (c) Use clear language rather than jargon; (d) Be divided into short sections and sentences; and (e) Use lists and tables wherever possible. If you feel that we have not met these requirements, send us comments by one PO 00000 Frm 00024 Fmt 4702 Sfmt 4702 2. Section 256.5 is amended by adding definitions for ‘‘Bonus or royalty credit,’’ ‘‘Central planning area,’’ ‘‘Coastline,’’ ‘‘Desoto Canyon OPD,’’ ‘‘Destin Dome OPD,’’ ‘‘Eastern planning area,’’ and ‘‘Pensacola OPD’’ to read as follows: § 256.5 Definitions. * * * * * (m) Bonus or royalty credit means a legal instrument or other written documentation, or an entry in an account managed by the Secretary that a bidder or lessee may use in lieu of any other monetary payment for— (1) A bonus due for a lease on the outer Continental Shelf; or (2) A royalty due on oil or gas production from any lease located on the outer Continental Shelf. (n) Central planning area means the Central Gulf of Mexico Planning Area of the outer Continental Shelf, as designated in the document entitled ‘‘Draft Proposed Program Outer Continental Shelf Oil and Gas Leasing Program 2007–2012,’’ dated February 2006. (o) Coastline means the line of ordinary low water along that portion of the coast in direct contact with the open sea and the line marking the seaward limit of inland waters. E:\FR\FM\01FEP1.SGM 01FEP1 6080 Federal Register / Vol. 73, No. 22 / Friday, February 1, 2008 / Proposed Rules (p) Desoto Canyon OPD means the official protraction diagram designated as Desoto Canyon which has a western edge located at the universal transverse mercator (UTM) X coordinate 1,346,400 in the North American Datum of 1927 (NAD 27). (q) Destin Dome OPD means the official protraction diagram designated as Destin Dome which has a western edge located at the universal transverse mercator (UTM) X coordinate 1,393,920 in the NAD 27. (r) Eastern planning area means the Eastern Gulf of Mexico Planning Area of the outer Continental Shelf, as designated in the document entitled ‘‘Draft Proposed Program Outer Continental Shelf Oil and Gas Leasing Program 2007–2012’’, dated February 2006. (s) Pensacola OPD means the official protraction diagram designated as Pensacola which has a western edge located at the universal transverse mercator (UTM) X coordinate 1,393,920 in the NAD 27. 3. A new subpart N consisting of §§ 256.90 through 256.95 are added to read as follows: Subpart N—Bonus or Royalty Credits for Exchange of Certain Leases Sec. 256.90 Which leases may I exchange for a bonus or royalty credit? 256.91 How much bonus or royalty credit will MMS grant in exchange for a lease? 256.92 What must I do to obtain a bonus or royalty credit? 256.93 How is the bonus or royalty credit allocated among multiple lease owners? 256.94 How may I use the bonus or royalty credit? 256.95 How do I transfer a bonus or royalty credit to another person? § 256.90 Which leases may I exchange for a bonus or royalty credit? sroberts on PROD1PC70 with PROPOSALS You may exchange a lease for a bonus or royalty credit if it: (a) Was in effect on December 20, 2006, and (b) Is located in: (1) The Eastern planning area and within 125 miles of the coastline of the State of Florida, or (2) The Central planning area and within the Desoto Canyon OPD, the Destin Dome OPD, or the Pensacola OPD and within 100 miles of the coastline of the State of Florida. § 256.91 How much bonus or royalty credit will MMS grant in exchange for a lease? The amount of the bonus or royalty credit for an exchanged lease equals the sum of: (a) The amount of the bonus payment; and VerDate Aug<31>2005 19:34 Jan 31, 2008 Jkt 214001 (b) All rental paid for the lease as of the date the lessee submits the request to exchange the lease under § 256.92 to MMS. § 256.92 What must I do to obtain a bonus or royalty credit? (a) To obtain the bonus or royalty credit, all of the record title interest owners in the lease must submit the following to the MMS Regional Supervisor for Leasing and Environment for the Gulf of Mexico on or before [INSERT THE DATE THAT IS 1 YEAR AFTER THE EFFECTIVE DATE OF THE FINAL RULE IN THE Federal Register]: (1) A written request to exchange the lease for the bonus or royalty credit, signed by all record title interest owners in the lease. (2) The name and contact information for a person who will act as a contact for each record title interest owner. (3) Documentation of each record title interest owner’s percentage share in the lease. (4) A list of all bonus and rental payments for that lease made by, or on behalf of, each of the current record title owners. (5) A written relinquishment of the lease as described in § 256.76. Notwithstanding § 256.76, the relinquishment will become effective when the credit becomes effective under paragraph (b) of this section. (b) The credit becomes effective when MMS issues a certification to the record title interest owners that the lease has qualified for the credit. § 256.93 How is the bonus or royalty credit allocated among multiple lease owners? The MMS will allocate the bonus or royalty credit for an exchanged lease to the current record title interest owners in the same percentage share as each owner has in the lease as of the date of the request to exchange the lease. § 256.94 How may I use the bonus or royalty credit? (a) You may use a credit issued under this part in lieu of a monetary payment due under any lease in the Gulf of Mexico not subject to the revenue distribution provisions of section 8(g)(2) of the OCSLA (43 U.S.C. 1337(g)(2)) for either: (1) A bonus for acquisition of an interest in a new lease; or (2) Royalty due on oil and gas production after [INSERT THE DATE THAT IS 30 DAYS AFTER THE PUBLICATION DATE OF THE FINAL RULE IN THE Federal Register]. (b) You may not use a bonus or royalty credit in lieu of delivering oil or gas taken as royalty-in-kind. PO 00000 Frm 00025 Fmt 4702 Sfmt 4702 (c) If you have any credit that remains unused after 5 years from the date MMS issued the credit, MMS reserves the right to apply the remaining credit to your ongoing obligations at its discretion. § 256.95 How do I transfer a bonus or royalty credit to another person? (a) You may transfer your bonus or royalty credit to any other person by submitting to the MMS Adjudication Unit for the Gulf of Mexico two originally executed transfer letters of agreement. (b) Authorized officers of all companies involved in transferring and receiving the credit must sign the transfer letters of agreement as indicated on the qualification card filed with MMS. (c) A transfer letter of agreement must include: (1) The effective date of the transfer, (2) The OCS–G number for the lease that originally qualified for the credit, (3) The amount of the credit being transferred, (4) Company names punctuated exactly as filed on the qualification card at MMS, and (5) A corporate seal, only if MMS used a corporate seal qualification process for your corporation. (d) The transferee of a credit transferred under this section may use it in accordance with § 256.94 as soon as MMS sends a confirmation of the transfer to the transferee. [FR Doc. E8–1860 Filed 1–31–08; 8:45 am] BILLING CODE 4310–MR–P ARCHITECTURAL AND TRANSPORTATION BARRIERS COMPLIANCE BOARD 36 CFR Parts 1190 and 1191 RIN 3014–AA22 Emergency Transportable Housing Advisory Committee Architectural and Transportation Barriers Compliance Board. ACTION: Notice of meeting. AGENCY: SUMMARY: The Architectural and Transportation Barriers Compliance Board (Access Board) has established an advisory committee to make recommendations for possible revisions to the Americans with Disabilities Act (ADA) and Architectural Barriers Act (ABA) Accessibility Guidelines to include provisions for emergency transportable housing. This notice announces the dates, time, and location E:\FR\FM\01FEP1.SGM 01FEP1

Agencies

[Federal Register Volume 73, Number 22 (Friday, February 1, 2008)]
[Proposed Rules]
[Pages 6073-6080]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-1860]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service

30 CFR Part 256

[Docket ID: MMS-2007-OMM-0064]
RIN 1010-AD44


Bonus or Royalty Credits for Relinquishing Certain Leases 
Offshore Florida

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Proposed rule.

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SUMMARY: The MMS proposes to amend its regulations for oil and gas 
leases on the Outer Continental Shelf to implement a mandate in the 
Gulf of Mexico Energy Security Act of 2006. This proposed rule would 
(1) provide a credit to lessees who relinquish certain eligible leases 
in the Gulf of Mexico; (2) define eligible leases as those within 125 
miles of the Florida coast in the Eastern Planning Area and certain 
leases within 100 miles of the Florida coast in the Central Planning 
Area; and (3) allow lessees to use the credits in lieu of monetary 
payment for either a lease bonus bid or royalty due on oil and gas 
production from most other leases in the Gulf of Mexico or to transfer 
the credits to other Gulf of Mexico lessees for their use.

DATES: Submit comments by April 1, 2008. The MMS may not fully consider 
comments received after this date. Submit comments to the Office of 
Management and Budget on the information collection burden in this 
proposed rule by March 3, 2008.

FOR FURTHER INFORMATION CONTACT: Marshall Rose, Chief, Economics 
Division, at (703) 787-1536.

ADDRESSES: You may submit comments on the rulemaking by any of the 
following methods. Please use the Regulation Identifier Number (RIN) 
1010-AD44 as an identifier in your message. See also Public 
Availability of Comments under Procedural Matters.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Select ``Minerals Management Service'' from the agency drop-down menu, 
then click ``submit.'' In the Docket ID column, select MMS-2007-OMM-
0064 to submit public comments and to view supporting and related 
materials available for this rulemaking. Information on using 
Regulations.gov, including instructions for accessing documents, 
submitting comments, and viewing the docket after the close of the 
comment period, is available through the site's ``User Tips'' link. All 
comments will be posted to the docket.
     Mail or hand-carry comments to the Department of the 
Interior; Minerals Management Service; Attention: Regulations and 
Standards Branch (RSB); 381 Elden Street, MS-4024, Herndon, Virginia 
20170-4817. Please reference ``Bonus or Royalty Credits for 
Relinquishing Certain Leases Offshore Florida, 1010-AD44'' in your 
comments and include your name and return address.
     Send comments on the information collection in this rule 
to: Interior Desk Officer 1010-AD44, Office of Management and Budget; 
202-395-6566 (fax); e-mail: oira_docket@omb.eop.gov. Please also send 
a copy to MMS.

SUPPLEMENTARY INFORMATION:

Background and Summary of the Proposed Rule

    Congress passed, and on December 20, 2006, the President signed, 
the Gulf of Mexico Energy Security Act of 2006 (GOMESA), Public Law No. 
109-432.

[[Page 6074]]

Section 104(c) of that statute authorizes the Secretary of the Interior 
(Secretary) to issue a bonus or royalty credit for the exchange of 
certain leases located offshore of the State of Florida. The statute 
defines leases eligible for the credit as those in existence on the 
enactment date of the GOMESA and located both within specified Outer 
Continental Shelf (OCS) planning areas and distances from the Florida 
coastline. The statute sets the size of the credit as equal to the 
bonus and rental paid for the relinquished eligible lease, and limits 
its use to payments by lessees of bonuses and royalties for leases in 
the Gulf of Mexico (GOM) not subject to revenue sharing under section 
8(g) of the Outer Continental Shelf Lands Act (OCSLA) (43 U.S.C. 
1337(g)). Finally, the statute mandates a regulatory process for 
notifying the Secretary of a lessee's decision to exchange a lease for 
a credit, issuing the credit, allocating the credit among multiple 
lease owners, and transferring the credit to other parties.
    To implement section 104(c), MMS proposes to add a new subpart N to 
30 CFR part 256. Part 256 deals with OCS lease administration, 
including transfer and termination of a lease. After briefly reviewing 
the credit issuing process, the following discussion explains how MMS 
proposes to handle redemption of the credits.

Issuing Credits

    Section 104, together with the definitions in section 102(1), (4), 
and (5), identifies the offshore area in which existing leases are 
located to be eligible to be exchanged for the credit. Therein, 
reference is made to parts of the Central Planning Area (CPA) and the 
Eastern Planning Area, as designated in the Draft Proposed Program 
Outer Continental Shelf Oil and Gas Leasing Program 2007-2012, dated 
February 2006. However, the area does not include all of the CPA in the 
area eligible for the credits. The GOMESA limits the included part of 
the CPA to the portion of the CPA within 100 miles of the coastline of 
the State of Florida, and to the area that lies either within a 
particular area shown on a map that MMS published 10 years ago, or, 
east of a particular coordinate line on the Pensacola Official 
Protraction Diagram.
    The MMS previously delineated the area in which leases are eligible 
for the credit using Official Protraction Diagram (OPD) designations. 
The OPD, in conjunction with the OCS block numbers, uniquely identifies 
each OCS block by a designated numbering system. The planning area 
boundaries that were in effect when MMS published the referenced maps 
coincided with the OPD boundaries. After recent changes MMS made in the 
boundary between its Eastern, Central, and Western Planning Areas for 
the GOM, the new planning area boundaries do not coincide with the pre-
existing OPD boundaries. Thus, definitions added to Sec. Sec.  256.5 
and 256.90 propose to use OPD boundaries to define the western extent 
of the eligible area. The northern and eastern extent of the eligible 
area is the seaward boundary of the State of Florida.
    The GOMESA defines the southern extent of the eligible area by 
reference to the distance from the Florida coastline. Parts of three 
OPDs (Desoto Canyon, Destin Dome, and Pensacola) are both in the 
eligible part of the new CPA and within the requisite 100 miles of the 
Florida coastline. Other parts of these three OPDs, as well as other 
OPDs, are in the new Eastern planning area and within the requisite 125 
miles of the Florida coastline. These areas contain a total of 79 still 
active leases as of the end of calendar year 2006. The GOMESA makes all 
of these leases that were in effect on December 20, 2006, the date of 
enactment of the GOMESA, eligible for this exchange program. The MMS 
seeks comments on whether this interpretation of eligibility for the 
credits based on location and lease status complies with the 
requirements specified in GOMESA.
    Section 256.91 proposes to grant credits equal to the original 
bonus paid for the relinquished lease plus the cumulative rental paid 
on that lease since issuance. Because the GOMESA explicitly values the 
credits as equal only to the sum of these two costs, no authority 
exists to include reimbursement for any other costs. Thus, MMS will not 
credit or value any exploration costs incurred in connection with 
eligible leases for purposes of issuing credits; nor will MMS include 
time value of money (interest) in calculating the amount of a credit. 
The MMS estimates the aggregate value of credits available under the 
statutory formula as slightly more than $60 million.
    The following table lists each lease identified under the proposed 
interpretation of GOMESA that is eligible for the credit and the amount 
of the credit. MMS seeks comments about whether any variations exist 
between the data in this table and the information held by the lease 
owners.

                             Leases and Amounts Eligible for Bonus or Royalty Credit
----------------------------------------------------------------------------------------------------------------
                                                       Lease                      Rental paid to
                    Lease No.                     effective date    Bid amount      12/31/2006     Total credit
----------------------------------------------------------------------------------------------------------------
G06390..........................................        2/1/1984        $957,000         $86,400      $1,043,400
G06401..........................................        2/1/1984       1,103,450          51,265       1,154,715
G06402..........................................        2/1/1984       1,106,780          85,825       1,192,605
G06406..........................................        2/1/1984       1,607,800          69,120       1,676,920
G06407..........................................        2/1/1984       1,308,800         311,040       1,619,840
G06408..........................................        2/1/1984       1,106,430         103,105       1,209,535
G06409..........................................        2/1/1984       1,213,500         103,105       1,316,605
G06440..........................................        2/1/1984         918,500          82,032       1,000,532
G06464..........................................        3/1/1984       1,107,500          57,762       1,165,262
G06469..........................................        2/1/1984       1,613,500          75,038       1,688,538
G06470..........................................        2/1/1984       1,107,500          75,038       1,182,538
G06474..........................................        2/1/1984       1,610,800          75,038       1,685,838
G06475..........................................        2/1/1984       1,201,700          75,038       1,276,738
G06476..........................................        2/1/1984       1,107,500          75,038       1,182,538
G06477..........................................        2/1/1984         908,700          75,038         983,738
G08308..........................................        3/1/1987       2,877,000          77,866       2,954,866
G08309..........................................        3/1/1987       2,325,000          17,173       2,342,173
G08310..........................................        3/1/1987       1,165,000          17,173       1,182,173
G08333..........................................        2/1/1988       1,379,000          71,854       1,450,854
G08334..........................................        2/1/1988       1,379,000          71,854       1,450,854
G08346..........................................        2/1/1988       1,355,000          67,593       1,422,593

[[Page 6075]]

 
G08361..........................................        8/1/1986       1,837,000          59,107       1,896,107
G08362..........................................        8/1/1986         944,000          59,107       1,003,107
G08363..........................................        8/1/1986       3,276,000          59,107       3,335,107
G08364..........................................        8/1/1986       2,377,000          59,107       2,436,107
G08365..........................................        8/1/1986       1,857,000          59,107       1,916,107
G08366..........................................        8/1/1986         944,000          59,107       1,003,107
G08367..........................................        8/1/1986       1,363,000          59,107       1,422,107
G08368..........................................        8/1/1986       1,117,000          59,107       1,176,107
G10404..........................................        4/1/1990         157,000          52,100         209,100
G10405..........................................        4/1/1990         145,000          52,100         197,100
G10408..........................................        4/1/1990         149,000          52,100         201,100
G10409..........................................        4/1/1990         187,000          52,100         239,100
G10410..........................................        4/1/1990         209,000          52,100         261,100
G10413..........................................       11/1/1989         150,550          51,899         202,449
G10414..........................................       11/1/1989         150,550          51,899         202,449
G10415..........................................        4/1/1990         153,000          52,100         205,100
G10417..........................................       11/1/1989         306,200          64,811         371,011
G10426..........................................        6/1/1990         150,550          37,199         187,749
G10427..........................................        6/1/1990         150,550          37,199         187,749
G10428..........................................       11/1/1989         218,880         115,445         334,325
G10429..........................................       11/1/1989         155,300          41,827         197,127
G10430..........................................        6/1/1990         145,000          47,330         192,330
G10431..........................................        6/1/1990         938,500          41,649         980,149
G10432..........................................        6/1/1990         330,900          41,649         372,549
G10433..........................................        6/1/1990         900,600          41,649         942,249
G10434..........................................        6/1/1990         245,200          41,649         286,849
G10435..........................................        6/1/1990         376,500          41,649         418,149
G10436..........................................       11/1/1989       2,102,400         115,445       2,217,845
G10437..........................................       11/1/1989         910,080         115,445       1,025,525
G10438..........................................       11/1/1989         155,200          41,747         196,947
G10439..........................................       11/1/1989         167,200          76,387         243,587
G10440..........................................       11/1/1989         184,500          80,743         265,243
G10443..........................................       11/1/1989         560,600          80,743         641,343
G10446..........................................       10/1/1990         146,000          61,995         207,995
G10447..........................................       10/1/1990         146,000          61,995         207,995
G10448..........................................       10/1/1990         146,000          61,995         207,995
G10449..........................................       10/1/1990         153,000          61,995         214,995
G10450..........................................       10/1/1990         153,000          61,995         214,995
G10451..........................................       10/1/1990         145,000          61,995         206,995
G10452..........................................       10/1/1990         168,000          61,995         229,995
G10453..........................................       10/1/1990         153,000          61,995         214,995
G10454..........................................       10/1/1990         168,000          61,995         229,995
G10455..........................................       10/1/1990         148,500          41,922         190,422
G10456..........................................       10/1/1990         156,100          41,922         198,022
G10459..........................................       10/1/1990         181,500          41,922         223,422
G10460..........................................       10/1/1990         148,700          41,922         190,622
G10461..........................................       10/1/1990         159,200          41,922         201,122
G10462..........................................       10/1/1990         196,500          41,922         238,422
G10463..........................................       10/1/1990         151,700          41,922         193,622
G10464..........................................       10/1/1990         157,500          41,922         199,422
G10465..........................................       10/1/1990         147,300          41,922         189,222
G10466..........................................       10/1/1990         147,300          41,922         189,222
G10471..........................................       10/1/1990         163,500          41,922         205,422
G10472..........................................       10/1/1990         195,400          41,922         237,322
G10473..........................................       10/1/1990         192,600          41,922         234,522
G10477..........................................       10/1/1990         157,600          41,922         199,522
G10484..........................................       10/1/1990         145,000          61,995         206,995
G10485..........................................       10/1/1990         158,000          61,995         219,995
                                                 ---------------------------------------------------------------
79..............................................  ..............     $55,458,120       4,944,064      60,402,184
----------------------------------------------------------------------------------------------------------------

    The process proposed by Sec.  256.92 for claiming a credit would 
begin when all parties holding record title interests in an eligible 
lease notify the Regional Supervisor for Leasing and Environment in the 
MMS GOM Regional Office of the decision to exchange the lease. Parties 
holding record title interest in an eligible lease are permitted up to 
1 year from the effective date of the final rule to apply for these 
credits. After that date, MMS will no longer accept applications for 
the credits provided for in this rule. In addition to a request for a 
credit, the notification would include: (1) The name of a contact for 
each record title holder; (2) the percentage record title interest of 
each owner; (3) a list of the bonus and rental payments made by, or on 
behalf of, all current owners of the lease; and (4) the form

[[Page 6076]]

(Form MMS-152, Relinquishment of Federal Oil and Gas Lease) necessary 
to execute relinquishment according to Sec.  256.76. The MMS would 
confirm the percentage interest and payments claimed by the current 
owners and add any bonus bid or rental payments made by prior owners to 
determine the credit amount.
    Once the adjudication unit in the MMS GOM Region has approved the 
exchange, the MMS' Minerals Revenue Management (MRM) office would post 
the credits in the appropriate company payor accounts of the record 
title interest owners. The credit would become available when MMS sends 
a written certification to the record title interest owners of an 
eligible lease that this lease has qualified for a credit of a specific 
amount.
    In the case of multiple record title interest owners of an eligible 
lease, Sec.  256.93 proposes that MMS would allocate the credit to each 
record title interest owner based on its percentage of total ownership 
interest in the lease at the time the owners submit to MMS the request 
to exchange the lease.
    The MMS recognizes that the original lessee(s) would have made 
bonus payments. If the original lessee sells its record title interest 
in a lease, the financial terms of the sale will have compensated the 
original lessee, in some manner satisfactory to it, for the bonus 
payment it made for its record title interest. Thus, the current record 
title interest owners made the timely and legally binding investment to 
acquire and hold the right to explore for and produce the oil and gas 
that may underlie the seabed on that lease. Therefore, MMS would 
allocate current record title interest owners the credit usable to 
acquire an interest in another lease or to pay royalties on production 
from another lease. Moreover, if the terms of any particular operating 
rights assignment imply any right or interest in that credit on the 
part of the assignee, then the current record title holder and the 
assignee may resolve that issue between themselves.

Redeeming Credits

    Section 256.94(a) proposes to authorize current record title 
interest owners to redeem these credits as either payment of bonus bids 
or royalties paid in value. The notice MMS sends certifying that a 
lease has qualified for a credit would include the amount of the credit 
and instructions on how to apply the credit, either to a bonus payment 
due on a successful bid for new leases or to royalties reported due on 
Form MMS 2014--Report of Sales and Royalty Remittance for other leases.
    Under section 104(c)(3) of the statute, the credit may not be used 
in lieu of payments due under a lease subject to the revenue 
distribution provisions of section 8(g) of the OCSLA (43 U.S.C. 
1337(g)). Under section 8(g)(2), the Secretary pays 27 percent of 
bonuses, rents, royalties, and other moneys collected from leases lying 
within 3 nautical miles of the seaward boundary of a coastal state to 
that state (or 27 percent of the portion of such revenues corresponding 
to the portion of the lease that lies within 3 nautical miles of the 
state's seaward boundary). Proposed Sec.  256.94(a) contains this 
restriction.
    Provisions in section 105 of the GOMESA create certain other 
revenue distribution requirements in addition to the 8(g) provisions. 
Since Congress certainly knew of, but did not include, these newer 
revenue distribution programs in this exclusion, this proposal allows a 
bonus or royalty credit to be used for payments due from leases subject 
to these newer revenue distribution provisions.
    Because using a credit to pay a bonus or royalty in lieu of payment 
in cash results in the United States receiving less money than if the 
bidder or lessee paid in cash, it necessarily follows that any 
distribution of royalty or bonus payments to a state or coastal 
political subdivision under GOMESA section 105 would result in a 
corresponding reduction from what it would have been had the entire 
payment been made in cash. However, MMS projects that the financial 
impact of section 105 on the coastal states during fiscal years 2007 
through 2016 would be very limited. In that time period, under the 
definition of ``qualified Outer Continental Shelf revenues'' in GOMESA 
section 102(9), section 105's distribution requirements apply only to 
revenues derived from new leases issued after GOMESA's enactment in the 
portion of the 181 Area located in the Eastern Planning Area and to the 
181 South Area. Production and royalty from such leases will not occur 
anytime soon. Further, MMS allocates the portion of qualified Outer 
Continental Shelf revenues paid to Gulf producing states between those 
states based on an inverse distance formula. Therefore, any financial 
impact on a particular state of a reduction in a particular bonus 
payment for a new lease in the subject areas because of use of a bonus 
credit should be very minimal. In fact, lessees who obtain credits will 
more likely apply them to royalties due under other existing leases 
with no revenue distribution to non-Federal recipients, or transfer 
them to other parties for that purpose, thus further reducing the 
financial impact to states and localities from this treatment of 
credit.
    The GOMESA limits the credit to monetary payments. The MMS makes 
explicit in proposed Sec.  256.94(b) that the credit does not apply to 
royalty-in-kind (RIK) deliveries. Section 102 of the statute defines 
the credit as follows:

    The term ``bonus or royalty credit'' means a legal instrument or 
other written documentation, or an entry in an account managed by 
the Secretary, that may be used in lieu of any other monetary 
[emphasis added] payment for--
    (A) a bonus bid for a lease on the outer Continental Shelf; or
    (B) a royalty due on oil or gas production from any lease 
located on the outer Continental Shelf.

    The RIK deliveries are not monetary payments. Since the lessee 
fulfills its royalty obligations by delivering a volume of oil and gas 
to MMS, the lessee pays no money when paying the RIK. Thus, a lessee 
cannot use a monetary credit in lieu of delivering RIK. Under current 
circumstances, exclusion of RIK would confine the application of a 
royalty credit under the proposed rule to about 30 percent of the 
roughly $4 billion in royalty generated annually by GOM producers. 
Recent royalty collections from 8(g) sources in the GOM total about 3 
percent of all oil and gas royalties collected offshore in the GOM. 
Thus, annual royalties currently paid in cash, to which credits under 
this proposed rule may apply, total over $1 billion under leases on 
tracts in the GOM lying outside the ``8(g) zone''--more than 16 times 
the total value of credits that could be issued under this rule, even 
if no credits were applied to bonus payments in future lease sales.
    Section 256.94(c) proposes to address credits that remain unused 
after 5 years from the date MMS issues the credits. The section would 
state that if any credit remains unused after 5 years from the date MMS 
issued the credit, the MMS reserves the right to apply the remaining 
credit to the credit holder's ongoing obligations at MMS's discretion.
    Section 256.95 proposes to allow current record title interest 
owners to transfer credits to other parties. The transferee of the 
credit could use the full face amount of the credit. (Any discount in a 
payment from the transferee to the transferor of the credit would be a 
matter solely between those two parties.) This attribute of the credit 
would largely mitigate any perceived limitation imposed by restricting 
use of the credit to future bonus or royalty in-value due. As 
indicated, the expected aggregate size of the credits created

[[Page 6077]]

under section 104(c) constitutes only about 6 percent of the royalty 
in-value collected annually in the GOM. Thus, an ample market should 
exist for companies that wish to transfer rather than directly use 
credits they may receive.
    When MMS receives the necessary transfer information, MRM will 
adjust the financial accounts of the transferor and transferee 
accordingly. The credit becomes available when the MMS sends a written 
confirmation to the transferee. Rather than create a standard form that 
must be executed to effect a credit transfer, this rule proposes to 
rely on a ``Letter of Agreement'' signed by an authorized official of 
both the transferor and transferee companies to transfer a bonus or 
royalty credit. A more formal process does not appear warranted by the 
few companies involved, all of which have other Gulf of Mexico 
activities, and the size of the credits relative to authorized uses. 
The MMS seeks comments on whether a high volume of transfers would 
warrant a more formal credit transfer process like that used for lease 
assignments.
    To summarize, this proposed rule would offer credits equal to past 
bonus and rental payments made in connection with 79 offshore leases 
near Florida in exchange for relinquishment of these leases. The 
necessary restrictions that MMS proposes for the use of those credits 
would not compromise their value because the credits would have no 
expiration date, are transferable, and in aggregate are quite small in 
magnitude relative to the bonus or royalty-in-value payment obligations 
to which they can be applied. The credits may be used to meet future 
bonus or royalty-in-value payments for leases in the GOM outside the 
8(g) zone.

Procedural Matters

Regulatory Planning and Review (Executive Order (E.O.) 12866)

    This proposed rule is not a significant rule as determined by the 
Office of Management and Budget (OMB) and is not subject to review 
under E.O. 12866.
    (1) This proposed rule would not have an annual effect of $100 
million or more on the economy. It would not adversely affect in a 
material way the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local, or tribal 
governments or communities. The total value of the credit is defined by 
statute as bonuses and rental paid on the leases in the eligible area. 
The MMS records show 79 leases are eligible. Total bonuses and rentals 
paid in connection with these leases is about $60 million.
    (2) This proposed rule would not create a serious inconsistency or 
otherwise interfere with an action taken or planned by another agency 
because the credit is confined to leases in Federal offshore waters 
that lie outside the coastal jurisdiction of State and other local 
agencies.
    (3) This proposed rule would not alter the budgetary effects of 
entitlements, grants, user fees or loan programs, or the rights or 
obligations of their recipients.
    (4) This proposed rule would not raise novel legal or policy 
issues. The proposed rule would implement a statutory program that 
exchanges a credit against future obligations for the return of old, 
largely inactive leases in a sensitive area.

Regulatory Flexibility Act

    The Department of the Interior certifies that this proposed rule 
would not have a significant economic effect on a substantial number of 
small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.).
    This proposed rule applies to the lessees holding record title 
interests in the 79 offshore leases located near the coastline of the 
State of Florida. These lessees fall under the Small Business 
Administration's North American Industry Classification System (NAICS) 
code 211111, Crude Petroleum and Natural Gas Extraction. Under this 
NAICS code, companies with less than 500 employees are considered small 
businesses. Only one of the current record title owners of these 79 
leases has less than 500 employees. Moreover, this rule provides a 
clear benefit to the lessees. It specifies a valuable credit and a 
simple process for claiming a benefit for relinquishing a lease which 
the owners have had trouble operating due to access limitations.
    This proposed rule would create a relatively small amount of total 
credits in exchange for certain leases through a relinquishment process 
that all OCS lessees are accustomed to using. The credits could be used 
to fulfill any of a relatively large pool of routine bonus or royalty 
in-value OCS obligations under leases located in the GOM. The credits 
also would be freely transferable or assignable, and would have no time 
limit on use. Thus, should a small entity obtain a credit through a 
transfer, it would be able to use the credit for routine obligations or 
it could exchange the credit for approximately equivalent value in a 
potentially large market of other users. The provisions of this 
proposed rule would not have a significant adverse economic effect on 
offshore lessees and operators, including those that are classified as 
small businesses.
    Your comments are important. The Small Business and Agriculture 
Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards were 
established to receive comments from small businesses about Federal 
agency enforcement actions. The Ombudsman will annually evaluate the 
enforcement activities and rate each agency's responsiveness to small 
business. If you wish to comment on the actions of MMS, call 1-888-734-
3247. You may comment to the Small Business Administration without fear 
of retaliation. Disciplinary action for retaliation by an MMS employee 
may include suspension or termination from employment with the DOI.

Small Business Regulatory Enforcement Fairness Act

    This proposed rule is not a major rule under the Small Business 
Regulatory Enforcement Fairness Act (5 U.S.C. 804(2)). This proposed 
rule:
    a. Would not have an annual effect on the economy of $100 million 
or more. This proposed rule would offer credits worth approximately $60 
million for the exchange of 79 leases in a sensitive area. Not all 
companies may choose to relinquish their leases for the credit offered. 
Even if all the credits were redeemed in 1 year, it would not have an 
annual effect on the economy of $100 million.
    b. Would not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, local government 
agencies, or geographic regions. The credit represents only a transfer 
of previous payments back to lessees. The relatively small amount 
returned by these credits would have little effect on markets, 
agencies, or regions.
    c. Would not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises. 
Productive activities have been restricted on the leases that would be 
returned, and the monetary credit received in exchange would be too 
small to have a perceptible effect.

Unfunded Mandates Reform Act

    This proposed rule would not impose an unfunded mandate on State, 
local, or tribal governments or the private sector of more than $100 
million per year. The proposed rule would not have a significant or 
unique effect on State, local, or tribal governments or the private 
sector. A statement containing

[[Page 6078]]

the information required by the Unfunded Mandates Reform Act (2 U.S.C. 
1531 et seq.) is not required.

Takings Implication Assessment (E.O. 12630)

    Under the criteria in E.O. 12630, this proposed rule does not have 
significant takings implications. The proposed rule is not a 
governmental action capable of interference with constitutionally 
protected property rights. A takings implication assessment is not 
required.

Federalism (E.O. 13132)

    Under the criteria in E.O. 13132, this proposed rule does not have 
sufficient federalism implications to warrant the preparation of a 
Federalism Assessment. As noted above, the potential revenue sharing 
effects are excluded either explicitly or implicitly by virtue of the 
treatment of the expected credit redemptions. This proposed rule would 
not substantially and directly affect the relationship between the 
Federal and State governments. To the extent that State and local 
governments have a role in OCS activities, this proposed rule would not 
affect that role. A Federalism Assessment is not required.

Civil Justice Reform (E.O. 12988)

    This rule complies with the requirements of E.O. 12988. 
Specifically, this rule:
    (a) Meets the criteria of section 3(a) requiring that all 
regulations be reviewed to eliminate errors and ambiguity and be 
written to minimize litigation; and
    (b) Meets the criteria of section 3(b)(2) requiring that all 
regulations be written in clear language and contain clear legal 
standards.

Consultation With Indian Tribes (E.O. 13175)

    Under the criteria in E.O. 13175, we have evaluated this proposed 
rule and determined that it has no potential effects on federally 
recognized Indian tribes. There are no Indian or tribal lands on the 
OCS.

Paperwork Reduction Act (PRA) of 1995

    This proposed rule contains a collection of information that will 
be submitted to OMB for review and approval under Sec.  3507(d) of the 
PRA. This proposed rule also refers to, but does not change, 
information collection burdens already covered and approved under OMB 
Control Number 1010-0006.
    As part of our continuing effort to reduce paperwork and respondent 
burdens, MMS invites the public and other Federal agencies to comment 
on any aspect of the reporting and recordkeeping burden. You may submit 
your comments on the information collection aspects of this rule 
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-AD44. Send a copy of your 
comments to the Regulations and Standards Branch (RSB), Attn: Comments; 
381 Elden Street, MS-4024; Herndon, Virginia 20170-4817. Please 
reference ``Bonus or Royalty Credits for Relinquishing Certain Leases 
Offshore Florida''--AD44 in your comments. You may obtain a copy of our 
submission to OMB for the new collection of information by contacting 
the Bureau's Information Collection Clearance Officer at (202) 208-
7744.
    The PRA 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. The OMB is 
required to make a decision concerning the collection of information 
contained in these proposed regulations between 30 to 60 days after 
publication of this document in the Federal Register. Therefore, a 
comment to OMB is best assured of having its full effect if OMB 
received it by March 3, 2008. This does not affect the deadline for the 
public to comment to MMS on the proposed regulations. The title of the 
information collection is ``30 CFR Part 256, Bonus or Royalty Credits 
for Relinquishing Certain Leases Offshore Florida.''
    Respondents are those from the approximately 130 Federal oil and 
gas lessees who may earn or trade for the bonus or royalty credit. This 
rulemaking affects those companies that own record title interests in 
79 leases. Responses to this collection are required to obtain 
benefits. The frequency of response is on occasion. The information 
collection (IC) does not include questions of a sensitive nature. The 
IC involves requests for a bonus or royalty credit in exchange for 
relinquishing certain leases or the transfer of such credit to another 
entity. The MMS will use this information to track the possession and 
redemption of these special bonus or royalty credits.
    The OMB approved the collection of information required by the 
current 30 CFR part 256 regulations under OMB Control Number 1010-0006 
(17,058 burden hours, expiration 5/31/2010). When the final regulations 
take effect, MMS will consolidate the information collection burden 
approved for this proposed rulemaking into the primary 30 CFR part 256 
information collection under 1010-0006.
    The following table shows the two new paperwork burden estimates 
for this proposed rulemaking. We estimate a total of 45 burden hours, 
including the time for gathering the information and submitting the 
request to MMS for review. It should be noted that this rulemaking 
concerns only 79 current leases and will not affect future leases. 
Therefore, the associated information collection would be a one-time 
only burden should respondents holding eligible leases elect to take 
advantage of the bonus or royalty credits for relinquishing these 
leases.

----------------------------------------------------------------------------------------------------------------
                                                                                  Average No. of
 Citation 30 CFR part 256 subpart N   Reporting & recordkeeping     Hour burden       annual       Annual burden
                                             requirement                             responses         hours
----------------------------------------------------------------------------------------------------------------
92(a)..............................  Request a bonus or royalty                1              30              30
                                      credit and submit
                                      supporting documentation.
----------------------------------------------------------------------------------------------------------------
92(a)(5)...........................  Submit a request to            Burden currently approved under 1010-0006.*
                                      relinquish lease according
                                      to Sec.   256.76.
----------------------------------------------------------------------------------------------------------------
95.................................  Request approval to                       1              15              15
                                      transfer bonus or credit
                                      to another party with
                                      supporting information.
----------------------------------------------------------------------------------------------------------------
                                  TOTAL BURDEN                                                45             45
----------------------------------------------------------------------------------------------------------------
* 240 hours for this requirement are already approved under 1010-0006.


[[Page 6079]]

    The MMS specifically solicits comments on the following questions:
    (a) Is the proposed collection of information necessary for MMS to 
properly perform its functions, and will it be useful?
    (b) Are the estimates of the burden hours of the proposed 
collection reasonable?
    (c) Do you have any suggestions that would enhance the quality, 
clarity, or usefulness of the information to be collected?
    (d) Is there a way to minimize the information collection burden on 
those who are to respond, including the use of appropriate automated 
electronic, mechanical, or other forms of information technology?
    In addition, the PRA requires agencies to estimate the total annual 
reporting and recordkeeping ``non-hour cost'' burden resulting from the 
collection of information. We have not identified any, and we solicit 
your comments on this item. For reporting and recordkeeping only, your 
response should split the cost estimate into two components: (a) Total 
capital and start-up cost component and (b) annual operation, 
maintenance, and purchase of services component. Your estimates should 
consider the costs to generate, maintain, and disclose or provide the 
information. You should describe the methods you use to estimate major 
cost factors, including system and technology acquisition, expected 
useful life of capital equipment, discount rate(s), and the period over 
which you incur costs. Capital and start-up costs include, among other 
items, computers and software you purchase to prepare for collecting 
information; monitoring, sampling, drilling, and testing equipment; and 
record storage facilities. Generally, your estimates should not include 
equipment or services purchased:
    (1) Before October 1, 1995;
    (2) To comply with requirements not associated with the information 
collection;
    (3) For reasons other than to provide information or keep records 
for the Government; or
    (4) As part of customary and usual business or private practices.

National Environmental Policy Act (NEPA) of 1969

    We have analyzed this proposed rule in accordance with the criteria 
of the National Environmental Policy Act and the Department Manual at 
516 DM. We determined this proposed rule does not constitute a major 
Federal action significantly affecting the quality of the human 
environment. This proposed rule deals with financial matters and has no 
direct effect on MMS decisions on environmental activities; hence, an 
environmental impact statement is not required. Pursuant to Department 
Manual 516 DM 2.3A (2), Section 1.10 of 516 DM 2, Appendix 1 excludes 
from documentation in an environmental assessment or impact statement 
``policies, directives, regulations and guidelines of an 
administrative, financial, legal, technical or procedural nature; or 
the environmental effects of which are too broad, speculative or 
conjectural to lend themselves to meaningful analysis and will be 
subject later to the NEPA process, either collectively or case-by-
case.'' Section 1.3 of the same appendix clarifies that royalties and 
audits are considered routine financial transactions that are subject 
to categorical exclusion from the NEPA process. No exception to the 
categorical exclusion applies.

Data Quality Act

    In developing this rule we did not conduct or use a study, 
experiment, or survey requiring peer review under the Data Quality Act 
(Pub. L. 106-554).

Effects on the Energy Supply (E.O. 13211)

    This rule is not a significant energy action under the definition 
in E.O. 13211. A Statement of Energy Effects is not required.

Public Availability of Comments

    Before including your address, phone number, email address, or 
other personal identifying information in your comment, you should be 
aware that your entire comment--including your personal identifying 
information--may be made publicly available at any time. While you can 
ask us in your comment to withhold your personal identifying 
information from public review, we cannot guarantee that we will be 
able to do so.

Clarity of This Regulation

    We are required by E.O. 12866, E.O. 12988, and by the Presidential 
Memorandum of June 1, 1998, to write all rules in plain language. This 
means that each rule we publish must:
    (a) Be logically organized;
    (b) Use the active voice to address readers directly;
    (c) Use clear language rather than jargon;
    (d) Be divided into short sections and sentences; and
    (e) Use lists and tables wherever possible.
    If you feel that we have not met these requirements, send us 
comments by one of the methods listed in the ADDRESSES section. To 
better help us revise the rule, your comments should be as specific as 
possible. For example, you should tell us the numbers of the sections 
or paragraphs that you find unclear, which sections or sentences are 
too long, the sections where you feel lists or tables would be useful, 
etc.

List of Subjects in 30 CFR Part 256

    Administrative practice and procedure, Continental shelf, 
Government contracts, Mineral royalties, Oil and gas exploration, 
Public lands--mineral resources, Reporting and recordkeeping 
requirements.

    Dated: January 16, 2008.
C. Stephen Allred,
Assistant Secretary--Land and Minerals Management.
    For the reasons stated in the preamble, the Minerals Management 
Service (MMS) proposes to amend 30 CFR part 256 as follows:

PART 256--LEASING OF SULPHUR OR OIL AND GAS IN THE OUTER 
CONTINENTIAL SHELF

    1. The authority citation for part 256 is revised to read as 
follows:

    Authority: 31 U.S.C. 9701, 42 U.S.C. 6213, 43 U.S.C. 1334, P. L. 
No. 109-432.

    2. Section 256.5 is amended by adding definitions for ``Bonus or 
royalty credit,'' ``Central planning area,'' ``Coastline,'' ``Desoto 
Canyon OPD,'' ``Destin Dome OPD,'' ``Eastern planning area,'' and 
``Pensacola OPD'' to read as follows:


Sec.  256.5  Definitions.

* * * * *
    (m) Bonus or royalty credit means a legal instrument or other 
written documentation, or an entry in an account managed by the 
Secretary that a bidder or lessee may use in lieu of any other monetary 
payment for--
    (1) A bonus due for a lease on the outer Continental Shelf; or
    (2) A royalty due on oil or gas production from any lease located 
on the outer Continental Shelf.
    (n) Central planning area means the Central Gulf of Mexico Planning 
Area of the outer Continental Shelf, as designated in the document 
entitled ``Draft Proposed Program Outer Continental Shelf Oil and Gas 
Leasing Program 2007-2012,'' dated February 2006.
    (o) Coastline means the line of ordinary low water along that 
portion of the coast in direct contact with the open sea and the line 
marking the seaward limit of inland waters.

[[Page 6080]]

    (p) Desoto Canyon OPD means the official protraction diagram 
designated as Desoto Canyon which has a western edge located at the 
universal transverse mercator (UTM) X coordinate 1,346,400 in the North 
American Datum of 1927 (NAD 27).
    (q) Destin Dome OPD means the official protraction diagram 
designated as Destin Dome which has a western edge located at the 
universal transverse mercator (UTM) X coordinate 1,393,920 in the NAD 
27.
    (r) Eastern planning area means the Eastern Gulf of Mexico Planning 
Area of the outer Continental Shelf, as designated in the document 
entitled ``Draft Proposed Program Outer Continental Shelf Oil and Gas 
Leasing Program 2007-2012'', dated February 2006.
    (s) Pensacola OPD means the official protraction diagram designated 
as Pensacola which has a western edge located at the universal 
transverse mercator (UTM) X coordinate 1,393,920 in the NAD 27.
    3. A new subpart N consisting of Sec. Sec.  256.90 through 256.95 
are added to read as follows:

Subpart N--Bonus or Royalty Credits for Exchange of Certain Leases

Sec.
256.90 Which leases may I exchange for a bonus or royalty credit?
256.91 How much bonus or royalty credit will MMS grant in exchange 
for a lease?
256.92 What must I do to obtain a bonus or royalty credit?
256.93 How is the bonus or royalty credit allocated among multiple 
lease owners?
256.94 How may I use the bonus or royalty credit?
256.95 How do I transfer a bonus or royalty credit to another 
person?


Sec.  256.90  Which leases may I exchange for a bonus or royalty 
credit?

    You may exchange a lease for a bonus or royalty credit if it:
    (a) Was in effect on December 20, 2006, and
    (b) Is located in:
    (1) The Eastern planning area and within 125 miles of the coastline 
of the State of Florida, or
    (2) The Central planning area and within the Desoto Canyon OPD, the 
Destin Dome OPD, or the Pensacola OPD and within 100 miles of the 
coastline of the State of Florida.


Sec.  256.91  How much bonus or royalty credit will MMS grant in 
exchange for a lease?

    The amount of the bonus or royalty credit for an exchanged lease 
equals the sum of:
    (a) The amount of the bonus payment; and
    (b) All rental paid for the lease as of the date the lessee submits 
the request to exchange the lease under Sec.  256.92 to MMS.


Sec.  256.92  What must I do to obtain a bonus or royalty credit?

    (a) To obtain the bonus or royalty credit, all of the record title 
interest owners in the lease must submit the following to the MMS 
Regional Supervisor for Leasing and Environment for the Gulf of Mexico 
on or before [INSERT THE DATE THAT IS 1 YEAR AFTER THE EFFECTIVE DATE 
OF THE FINAL RULE IN THE Federal Register]:
    (1) A written request to exchange the lease for the bonus or 
royalty credit, signed by all record title interest owners in the 
lease.
    (2) The name and contact information for a person who will act as a 
contact for each record title interest owner.
    (3) Documentation of each record title interest owner's percentage 
share in the lease.
    (4) A list of all bonus and rental payments for that lease made by, 
or on behalf of, each of the current record title owners.
    (5) A written relinquishment of the lease as described in Sec.  
256.76. Notwithstanding Sec.  256.76, the relinquishment will become 
effective when the credit becomes effective under paragraph (b) of this 
section.
    (b) The credit becomes effective when MMS issues a certification to 
the record title interest owners that the lease has qualified for the 
credit.


Sec.  256.93  How is the bonus or royalty credit allocated among 
multiple lease owners?

    The MMS will allocate the bonus or royalty credit for an exchanged 
lease to the current record title interest owners in the same 
percentage share as each owner has in the lease as of the date of the 
request to exchange the lease.


Sec.  256.94  How may I use the bonus or royalty credit?

    (a) You may use a credit issued under this part in lieu of a 
monetary payment due under any lease in the Gulf of Mexico not subject 
to the revenue distribution provisions of section 8(g)(2) of the OCSLA 
(43 U.S.C. 1337(g)(2)) for either:
    (1) A bonus for acquisition of an interest in a new lease; or
    (2) Royalty due on oil and gas production after [INSERT THE DATE 
THAT IS 30 DAYS AFTER THE PUBLICATION DATE OF THE FINAL RULE IN THE 
Federal Register].
    (b) You may not use a bonus or royalty credit in lieu of delivering 
oil or gas taken as royalty-in-kind.
    (c) If you have any credit that remains unused after 5 years from 
the date MMS issued the credit, MMS reserves the right to apply the 
remaining credit to your ongoing obligations at its discretion.


Sec.  256.95  How do I transfer a bonus or royalty credit to another 
person?

    (a) You may transfer your bonus or royalty credit to any other 
person by submitting to the MMS Adjudication Unit for the Gulf of 
Mexico two originally executed transfer letters of agreement.
    (b) Authorized officers of all companies involved in transferring 
and receiving the credit must sign the transfer letters of agreement as 
indicated on the qualification card filed with MMS.
    (c) A transfer letter of agreement must include:
    (1) The effective date of the transfer,
    (2) The OCS-G number for the lease that originally qualified for 
the credit,
    (3) The amount of the credit being transferred,
    (4) Company names punctuated exactly as filed on the qualification 
card at MMS, and
    (5) A corporate seal, only if MMS used a corporate seal 
qualification process for your corporation.
    (d) The transferee of a credit transferred under this section may 
use it in accordance with Sec.  256.94 as soon as MMS sends a 
confirmation of the transfer to the transferee.

 [FR Doc. E8-1860 Filed 1-31-08; 8:45 am]
BILLING CODE 4310-MR-P