Bonus or Royalty Credits for Relinquishing Certain Leases Offshore Florida, 6073-6080 [E8-1860]
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sroberts on PROD1PC70 with PROPOSALS
Federal Register / Vol. 73, No. 22 / Friday, February 1, 2008 / Proposed Rules
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(m) In reviewing the decision to deny
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(1) Whether the denial or removal
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(2) Whether the denial or removal
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(n) Except as provided in paragraph
(o) of this section, the Director shall
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the deadline. The Director’s final
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(o) Whenever the United States
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(1) Be limited to deciding whether the
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decision should take effect immediately;
and
(3) Not constitute final agency action
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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,
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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
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(r) When a decision to remove an
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(1) Immediately cease providing
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to prospective clients;
(2) No later than 3 business days after
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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
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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
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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: https://
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.
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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
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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
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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
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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
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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
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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
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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.
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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
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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
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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
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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.
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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
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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
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E:\FR\FM\01FEP1.SGM
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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
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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
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19:34 Jan 31, 2008
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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
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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.
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(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
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19:34 Jan 31, 2008
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(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.
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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]
=======================================================================
-----------------------------------------------------------------------
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.
-----------------------------------------------------------------------
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: https://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
