Agency Information Collection Activities: Proposed Collection, Comment Request, 45055-45065 [E8-17730]

Download as PDF Federal Register / Vol. 73, No. 149 / Friday, August 1, 2008 / Notices conveyance of mineral interests, and payment of publication costs to the Las Vegas Field Office. The purchaser must remit the remainder of the purchase price within 180 days from the date of receiving the sale offer to the Las Vegas Field Office. Payments must be received by certified check, postal money order, bank draft, or cashier’s check payable to the U.S. Department of the InteriorBLM. Failure to meet conditions established for this sale will void the sale and any monies received will be forfeited. Arrangements for electronic fund transfer to BLM for the balance due shall be made a minimum of two weeks prior to the date you wish to make payment. The BLM may accept or reject any or all offers to purchase any parcel, or may withdraw any parcel of land or interest therein from sale, if, in the opinion of the authorized officer, consummation of the sale would not be fully consistent with FLPMA or other applicable laws or is determined not to be in the public interest. The parcel of land will not be offered for sale prior to 60 days from the date of publication of this notice. Only written comments submitted by postal service or overnight mail will be considered as properly filed. Electronic mail, facsimile, or telephone comments will not be considered. Before including your address, phone number, e-mail 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. Any adverse comments regarding the proposed sale will be reviewed by the BLM Nevada State Director, who may sustain, vacate, or modify this realty action and issue a final determination. In the absence of timely filed objections, this realty action will become the final determination of the Department of the Interior. mstockstill on PROD1PC66 with NOTICES Authority: 43 CFR part 2711. Dated: July 14, 2008. Mary Jo Rugwell, Manager, Las Vegas Field Office. [FR Doc. E8–17615 Filed 7–31–08; 8:45 am] BILLING CODE 4310–HC–P VerDate Aug<31>2005 19:39 Jul 31, 2008 Jkt 214001 DEPARTMENT OF THE INTERIOR Minerals Management Service [Docket No. MMS–2008–MRM–0029] Agency Information Collection Activities: Proposed Collection, Comment Request Minerals Management Service (MMS), Interior. ACTION: Notice of an extension of a currently approved information collection (OMB Control Number 1010– 0103). AGENCY: SUMMARY: To comply with the Paperwork Reduction Act of 1995 (PRA), we are inviting comments on a collection of information that we will submit to the Office of Management and Budget (OMB) for review and approval. We changed the title of this information collection request (ICR) to meet OMB requirements. The new title of this ICR is ‘‘30 CFR Parts 202, 206, and 207, Indian Oil and Gas Valuation.’’ DATES: Submit written comments on or before September 2, 2008. ADDRESSES: You may submit comments by the following methods: • Electronically go to http:// www.regulations.gov. In the ‘‘Comment or Submission’’ column, enter ‘‘MMS– 2008–MRM–0029’’ to view supporting and related materials for this ICR. Click on ‘‘Send a comment or submission’’ link to submit public comments. 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 submitted will be posted to the docket. • Mail comments to Hyla Hurst, Regulatory Specialist, Minerals Management Service, Minerals Revenue Management, P.O. Box 25165, MS 302B2, Denver, Colorado 80225. Please reference ICR 1010–0103 in your comments. • Hand-carry comments or use an overnight courier service. Our courier address is Building 85, Room A–614, Denver Federal Center, West 6th Ave. and Kipling Blvd., Denver, Colorado 80225. Please reference ICR 1010–0103 in your comments. FOR FURTHER INFORMATION CONTACT: Hyla Hurst, telephone (303) 231–3495, or email Hyla.Hurst@mms.gov. You may also contact Hyla Hurst to obtain copies, at no cost, of (1) The ICR, (2) any associated forms, and (3) the regulations that require the subject collection of information. PO 00000 Frm 00099 Fmt 4703 Sfmt 4703 45055 SUPPLEMENTARY INFORMATION: Title: 30 CFR Parts 202, 206, and 207, Indian Oil and Gas Valuation. OMB Control Number: 1010–0103. Bureau Form Number: Forms MMS– 4109, MMS–4110, MMS–4295, MMS– 4410, and MMS–4411. Abstract: The Secretary of the U.S. Department of the Interior (Secretary) is responsible for matters relevant to mineral resource development on Federal and Indian lands and the Outer Continental Shelf (OCS). Under the Mineral Leasing Act (30 U.S.C. 1923), the Indian Mineral Development Act of 1982 (25 U.S.C. 2103), and the Outer Continental Shelf Lands Act (43 U.S.C. 1353), the Secretary is responsible for (1) Managing the production of minerals from Federal and Indian lands and the OCS; (2) collecting royalties and other mineral revenues from lessees who produce minerals; and (3) distributing the funds collected in accordance with applicable laws. The Secretary also has a trust responsibility to manage Indian lands and seek advice and information from Indian beneficiaries. The MMS performs the minerals revenue management functions and assists the Secretary in carrying out the Department’s trust responsibility for Indian lands. Applicable laws pertaining to mineral royalties are located on our Web site at http:// www.mrm.mms.gov/Laws_R_D/ PublicLawsAMR.htm. Regulations at 30 CFR part 202, subparts C and J, pertain to royalties; part 206, subparts B and E, govern the valuation of oil and gas produced from leases on Indian lands; and part 207 pertains to recordkeeping. Indian tribes and individual Indian mineral owners receive all royalties generated from their lands. Determining product valuation is essential to ensure that Indian tribes and individual Indian mineral owners receive payment on the full value of the minerals removed from their lands. Failure to collect the data described in this information collection could result in the undervaluation of leased minerals on Indian lands. All data reported is subject to subsequent audit and adjustment. Indian Oil The regulations apply to all oil production from Indian oil and gas leases, except leases on the Osage Indian Reservation. The regulations provide that lessees determine the value of oil based on the higher of: (1) The gross proceeds under an arm’s-length contract, or (2) major portion analysis. These oil valuation methods are eligible for applicable transportation allowances. From information collected E:\FR\FM\01AUN1.SGM 01AUN1 45056 Federal Register / Vol. 73, No. 149 / Friday, August 1, 2008 / Notices on Form MMS–4110, Oil Transportation Allowance Report, MMS verifies transportation allowances during the product valuation verification to determine if the lessee reported and paid the proper royalty amount. The MMS and tribal personnel evaluate whether the transportation allowances reported and claimed by lessees are within regulatory allowance limitations. Indian Gas The regulations apply to all gas production from Indian oil and gas leases, except leases on the Osage Indian Reservation. Most Indian leases contain the requirement to perform accounting for comparison (dual accounting) for gas produced from the lease. Lessees must elect to perform actual dual accounting as defined in 30 CFR 206.176 or alternative dual accounting as defined in 30 CFR 206.173. Lessees use Form MMS–4410, Accounting for Comparison [Dual Accounting], to certify that dual accounting is not required on an Indian lease or to make an election for actual or alternative dual accounting for Indian leases. The regulations require lessees to submit Form MMS–4411, Safety Net Report, when gas production from an Indian oil or gas lease is sold beyond the first index pricing point. The safety net calculation establishes the minimum value, for royalty purposes, of natural gas production from Indian oil and gas 4393. This form provides MMS with the data necessary to make a decision whether to approve or deny the request and track deductions on royalty reports. leases. This reporting requirement ensures that Indian lessors receive all royalties due and aids MMS compliance efforts. The MMS and tribal personnel use the information collected on Form MMS– 4295, Gas Transportation Allowance Report, to evaluate whether transportation allowances reported under a non-arm’s-length contract or no contract are reasonable, and actual costs are within regulatory allowance limitations. The MMS and tribal personnel use the information collected on Form MMS– 4109, Gas Processing Allowance Summary Report, to evaluate whether processing allowances reported under a non-arm’s-length contract or no contract are reasonable, and actual costs are within regulatory allowance limitations. Summary The MMS is requesting OMB’s approval to continue to collect this information. Not collecting this information would limit the Secretary’s ability to discharge his/her duties and may also result in loss of royalty payments to Indian tribes and individual Indian mineral owners. Proprietary information submitted to MMS under this collection is protected, and no items of a sensitive nature are collected. The requirement to respond is mandatory for Form MMS–4411, Safety Net Report, when certain circumstances exist. For all other forms in this collection, the requirement to respond is voluntary; i.e., a response is required to obtain a benefit. Frequency of Response: Annually and on occasion. Estimated Number and Description of Respondents: 302 Indian lessees. Estimated Annual Reporting and Recordkeeping ‘‘Hour’’ Burden: 1,074 hours. We have not included in our estimates certain requirements performed in the normal course of business and considered usual and customary. The following chart shows the estimated burden hours by CFR section and paragraph: Indian Oil and Gas Form MMS–4393, Request to Exceed Regulatory Allowance Limitation, is used for both Federal and Indian leases. Most of the burden hours are incurred on Federal leases; therefore, the form is approved under ICR 1010–0136, pertaining to Federal oil and gas leases. However, we include a discussion of the form in this ICR, as well as the burden hours for Indian leases. To request permission to exceed a regulatory allowance limit, lessees must submit a letter to MMS explaining why a higher allowance limit is necessary and provide supporting documentation, including a completed Form MMS– RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS 30 CFR Reporting and recordkeeping requirement Average number of annual responses Hour burden Annual burden hours 202—ROYALTIES Subpart C—Federal and Indian Oil 202.101 ............................... Standards for reporting and paying royalties. Oil volumes are to be reported in barrels of clean oil of 42 standard U.S. gallons (231 cubic inches each) at 60 °F. * * * Burden covered under OMB Control Number 1010–0140 (expires 11/30/2009). Burden covered under § 210.52. Subpart J—Gas Production From Indian Leases How do I determine the volume of production for which I must pay royalty if my lease is not in an approved Federal unit or communitization agreement (AFA)? (b) You and all other persons paying royalties on the lease must report and pay royalties based on your takes. * * * 202.551(c) ........................... mstockstill on PROD1PC66 with NOTICES 202.551(b) .......................... (c) You and all other persons paying royalties on the lease may ask MMS for permission * * * 202.558(a) and (b) .............. What standards do I use to report and pay royalties on gas? (a) You must report gas volumes as follows: * * * (b) You must report residue gas and gas plant product volumes as follows: * * * VerDate Aug<31>2005 19:39 Jul 31, 2008 Jkt 214001 PO 00000 Frm 00100 Fmt 4703 Sfmt 4703 Burden covered under OMB Control Number 1010–0140. Burden covered under § 210.52. 1 1 Burden covered under OMB Control Number 1010–0140. Burden covered under § 210.52. E:\FR\FM\01AUN1.SGM 01AUN1 1 45057 Federal Register / Vol. 73, No. 149 / Friday, August 1, 2008 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued 30 CFR Reporting and recordkeeping requirement Hour burden Average number of annual responses Annual burden hours 206—PRODUCT VALUATION Subpart B—Indian Oil Transportation allowances—general. (b)(2) Upon request of a lessee, MMS may approve a transportation allowance deduction in excess of the limitation prescribed by paragraph (b)(1) of this section. * * * An application for exception (using Form MMS–4393, Request to Exceed Regulatory Allowance Limitation) must contain all relevant and supporting documentation necessary for MMS to make a determination. * * * Burden covered under OMB Control Number 1010–0136 (expires 06/30/2009). 206.57(a)(1)(i) ..................... Determination of transportation allowances. (a) Arm’s-length transportation contracts. (1)(i) * * * The lessee shall have the burden of demonstrating that its contract is arm’s-length. AUDIT PROCESS. See note. 206.57(a)(1)(i) ..................... (a) Arm’s-length transportation contracts. (1)(i) * * * Before any deduction may be taken, the lessee must submit a completed page one of Form MMS–4110 (and Schedule 1), Oil Transportation Allowance Report * * * Burden covered under § 206.57(c)(1)(i) and (iii). 206.57(a)(1)(iii) ................... (a) Arm’s-length transportation contracts. (1)(iii) * * * When MMS determines that the value of the transportation may be unreasonable, MMS will notify the lessee and give the lessee an opportunity to provide written information justifying the lessee’s transportation costs. AUDIT PROCESS. See note. 206.57(a)(2)(i) ..................... (a) Arm’s-length transportation contracts. (2)(i) * * * Except as provided in this paragraph, no allowance may be taken for the costs of transporting lease production which is not royalty-bearing without MMS approval. Burden covered under § 206.57(a)(3). 206.57(a)(2)(ii) .................... (a) Arm’s-length transportation contracts. (2)(ii) Notwithstanding the requirements of paragraph (i), the lessee may propose to MMS a cost allocation method on the basis of the values of the products transported. * * * 20 1 20 206.57(a)(3) ........................ (a) Arm’s-length transportation contracts. (3) If an arm’s-length transportation contract includes both gaseous and liquid products, and the transportation costs attributable to each product cannot be determined from the contract, the lessee shall propose an allocation procedure to MMS. * * * The lessee shall submit all available data to support its proposal. * * * 40 1 40 206.57(b)(1) ........................ (b) Non-arm’s-length or no contract. (1) * * * A transportation allowance may be claimed retroactively for a period of not more than 3 months prior to the first day of the month that Form MMS–4110 is filed with MMS, unless MMS approves a longer period upon a showing of good cause by the lessee. * * * Burden covered under § 206.57(c)(2)(i), and (c)(2)(iii). 206.57(b)(1) ........................ (b) Non-arm’s-length or no contract. (1) * * * When necessary or appropriate, MMS may direct a lessee to modify its actual transportation allowance deduction. Burden covered under OMB Control Number 1010–0140. Burden covered under § 210.52. 206.57(b)(2)(iv) ................... mstockstill on PROD1PC66 with NOTICES 206.56(b)(2) ........................ (b) Non-arm’s-length or no contract. (2)(iv) * * * After a lessee has elected to use either method for a transportation system, the lessee may not later elect to change to the other alternative without approval of MMS. 20 1 20 206.57(b)(2)(iv)(A) .............. (b) Non-arm’s-length or no contract. (2)(iv)(A) * * * After an election is made, the lessee may not change methods without MMS approval. * * * 20 1 20 VerDate Aug<31>2005 19:39 Jul 31, 2008 Jkt 214001 PO 00000 Frm 00101 Fmt 4703 Sfmt 4703 E:\FR\FM\01AUN1.SGM 01AUN1 45058 Federal Register / Vol. 73, No. 149 / Friday, August 1, 2008 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Average number of annual responses Annual burden hours 40 1 40 (b) Non-arm’s-length or no contract. (3)(ii) Notwithstanding the requirements of paragraph (i), the lessee may propose to MMS a cost allocation method on the basis of the values of the products transported. * * * 20 1 20 206.57(b)(4) ........................ (b) Non-arm’s-length or no contract. (4) Where both gaseous and liquid products are transported through the same transportation system, the lessee shall propose a cost allocation procedure to MMS. * * * The lessee shall submit all available data to support its proposal. * * * 20 1 20 206.57(b)(5) ........................ (b) Non-arm’s-length or no contract. (5) A lessee may apply to MMS for an exception from the requirement that it compute actual costs in accordance with paragraphs (b)(1) through (b)(4) of this section. * * * 20 1 20 206.57(c)(1)(i) ..................... (c) Reporting requirements. (1) Arm’s-length contracts. (i) With the exception of those transportation allowances specified in paragraphs (c)(1)(v) and (c)(1)(vi) of this section, the lessee shall submit page one of the initial Form MMS–4110 (and Schedule 1), Oil Transportation Allowance Report, prior to, or at the same time as, the transportation allowance determined, under an arm’s-length contract, is reported on Form MMS–2014, Report of Sales and Royalty Remittance. * * * 4 4 16 206.57(c)(1)(iii) .................... (c) Reporting requirements. (1) Arm’s-length contracts. (iii) After the initial reporting period and for succeeding reporting periods, lessees must submit page one of Form MMS–4110 (and Schedule 1) within 3 months after the end of the calendar year, or after the applicable contract or rate terminates or is modified or amended, whichever is earlier, unless MMS approves a longer period (during which period the lessee shall continue to use the allowance from the previous reporting period). 4 4 16 206.57(c)(1)(iv) ................... (c) Reporting requirements. (1) Arm’s-length contracts. (iv) MMS may require that a lessee submit arm’s-length transportation contracts, production agreements, operating agreements, and related documents. Documents shall be submitted within a reasonable time, as determined by MMS. AUDIT PROCESS. See note. 206.57(c)(2)(i) ..................... (c) Reporting requirements. (2) Non-arm’s-length or no contract. (i) With the exception of those transportation allowances specified in paragraphs (c)(2)(v), (c)(2)(vii) and (c)(2)(viii) of this section, the lessee shall submit an initial Form MMS–4110 prior to, or at the same time as, the transportation allowance determined under a non-arm’s-length contract or no-contract situation is reported on Form MMS–2014. * * * The initial report may be based upon estimated costs. 6 1 6 Reporting and recordkeeping requirement 206.57(b)(3)(i) ..................... (b) Non-arm’s-length or no contract. (3)(i) * * * Except as provided in this paragraph, the lessee may not take an allowance for transporting lease production which is not royalty bearing without MMS approval. 206.57(b)(3)(ii) .................... mstockstill on PROD1PC66 with NOTICES 30 CFR VerDate Aug<31>2005 19:39 Jul 31, 2008 Jkt 214001 PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 Hour burden E:\FR\FM\01AUN1.SGM 01AUN1 45059 Federal Register / Vol. 73, No. 149 / Friday, August 1, 2008 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Average number of annual responses Hour burden Annual burden hours 3 18 30 CFR Reporting and recordkeeping requirement 206.57(c)(2)(iii) .................... (c) Reporting requirements. (2) Non-arm’s-length or no contract. (iii) For calendar-year reporting periods succeeding the initial reporting period, the lessee shall submit a completed Form MMS–4110 containing the actual costs for the previous reporting period. If oil transportation is continuing, the lessee shall include on Form MMS–4110 its estimated costs for the next calendar year. * * * MMS must receive the Form MMS–4110 within 3 months after the end of the previous reporting period, unless MMS approves a longer period (during which period the lessee shall continue to use the allowance from the previous reporting period). 206.57(c)(2)(iv) ................... (c) Reporting requirements. (2) Non-arm’s-length or no contract. (iv) For new transportation facilities or arrangements, the lessee’s initial Form MMS–4110 shall include estimates of the allowable oil transportation costs for the applicable period. * * * Burden covered under § 206.57(c)(2)(i). 206.57(c)(2)(v) .................... (c) Reporting requirements. (2) Non-arm’s-length or no contract. (v) * * * only those allowances that have been approved by MMS in writing * * * Burden covered under § 206.57(c)(2)(i). 206.57(c)(2)(vi) ................... (c) Reporting requirements. (2) Non-arm’s-length or no contract. (vi) Upon request by MMS, the lessee shall submit all data used to prepare its Form MMS–4110. The data shall be provided within a reasonable period of time, as determined by MMS. AUDIT PROCESS. See note. 206.57(c)(4) and (e)(2) ....... (c) Reporting requirements. (4) Transportation allowances must be reported as a separate line item on Form MMS–2014 * * * (e) Adjustments. (2) For lessees transporting production from Indian leases, the lessee must submit a corrected Form MMS–2014 to reflect actual costs * * * Burden covered under OMB Control Number 1010–0140. Burden covered under § 210.52. 206.59 ................................. May I ask MMS for valuation guidance? You may ask MMS for guidance in determining value. You may propose a value method to MMS. Submit all available data related to your proposal and any additional information MMS deems necessary. * * * 206.61(a) and (b) ................ What records must I keep and produce? (a) On request, you must make available sales, volume, and transportation data for production you sold, purchased, or obtained from the field or area. You must make this data available to MMS, Indian representatives, or other authorized persons. (b) You must retain all data relevant to the determination of royalty value. * * * 6 20 1 20 25 100 AUDIT PROCESS. See note. 206—PRODUCT VALUATION Subpart E—Indian Gas mstockstill on PROD1PC66 with NOTICES 206.172(b)(1)(ii) .................. VerDate Aug<31>2005 19:39 Jul 31, 2008 How do I value gas produced from leases in an index zone? (b) Valuing residue gas and gas before processing. (1)(ii) Gas production that you certify on Form MMS–4410 * * * is not processed before it flows into a pipeline with an index but which may be processed later * * * Jkt 214001 PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 E:\FR\FM\01AUN1.SGM 4 01AUN1 45060 Federal Register / Vol. 73, No. 149 / Friday, August 1, 2008 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Average number of annual responses 10 30 206.172(e)(6)(i) and (iii) ...... (e) Determining the minimum value for royalty purposes of gas sold beyond the first index pricing point. (6)(i) You must report the safety net price for each index zone to MMS on Form MMS–4411, Safety Net Report, no later than June 30 following each calendar year; * * * (iii) MMS may order you to amend your safety net price within one year from the date your Form MMS–4411 is due or is filed, whichever is later. * * * 206.172(e)(6)(ii) .................. (e) Determining the minimum value for royalty purposes of gas sold beyond the first index pricing point. (6)(ii) You must pay and report on Form MMS–2014 additional royalties due no later than June 30 following each calendar year * * * 206.172(f)(1)(ii), (f)(2), and (f)(3). (f) Excluding some or all tribal leases from valuation under this section. (1) An Indian tribe may ask MMS to exclude some or all of its leases from valuation under this section. * * * (ii) If an Indian tribe requests exclusion from an index zone for less than all of its leases, MMS will approve the request only if the excluded leases may be segregated into one or more groups based on separate fields within the reservation. (2) An Indian tribe may ask MMS to terminate exclusion of its leases from valuation under this section. * * * (3) The Indian tribe’s request to MMS under either paragraph (f)(1) or (2) of this section must be in the form of a tribal resolution. * * * 40 1 40 206.173(a)(1) ...................... How do I calculate the alternative methodology for dual accounting? (a) Electing a dual accounting method. (1) * * * You may elect to perform the dual accounting calculation according to either 206.176(a) (called actual dual accounting), or paragraph (b) of this section (called the alternative methodology for dual accounting). 2 19 38 206.173(a)(2) ...................... (a) Electing a dual accounting method. (2) You must make a separate election to use the alternative methodology for dual accounting for your Indian leases in each MMS-designated area. * * * Burden covered under § 206.173(a)(1). 206.174(a)(4)(ii) .................. How do I value gas production when an index-based method cannot be used? (a) Situations in which an index-based method cannot be used. (4)(ii) If the major portion value is higher, you must submit an amended Form MMS–2014 to MMS by the due date specified in the written notice from MMS of the major portion value. * * * Burden covered under OMB Control Number 1010–0140. Burden covered under § 210.52. 206.174(b)(1)(i) and (iii); (b)(2); (d)(2). mstockstill on PROD1PC66 with NOTICES Reporting and recordkeeping requirement (b) Arm’s-length contracts. (1)(i) You have the burden of demonstrating that your contract is arm’s-length. * * * (iii) * * * In these circumstances, MMS will notify you and give you an opportunity to provide written information justifying your value. * * * (2) MMS may require you to certify that your arm’s-length contract provisions include all of the consideration the buyer pays, either directly or indirectly, for the gas, residue gas, or gas plant product. (d) Supporting data. (2) You must make all such data available upon request to the authorized MMS or Indian representatives, to the Office of the Inspector General of the Department, or other authorized persons. * * * AUDIT PROCESS. See note. VerDate Aug<31>2005 19:39 Jul 31, 2008 Jkt 214001 PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 Hour burden Annual burden hours 30 CFR 3 Burden covered under OMB Control Number 1010–0140. Burden covered under § 210.52. E:\FR\FM\01AUN1.SGM 01AUN1 45061 Federal Register / Vol. 73, No. 149 / Friday, August 1, 2008 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Average number of annual responses Hour burden Annual burden hours 30 CFR Reporting and recordkeeping requirement 206.174(d) .......................... (d) Supporting data. If you determine the value of production under paragraph (c) of this section, you must retain all data relevant to determination of royalty value. 206.174(f) ........................... (f) Value guidance. You may ask MMS for guidance in determining value. You may propose a valuation method to MMS. Submit all available data related to your proposal and any additional information MMS deems necessary. * * * 40 1 40 206.175(d)(4) ...................... How do I determine quantities and qualities of production for computing royalties? (d)(4) You may request MMS approval of other methods for determining the quantity of residue gas and gas plant products allocable to each lease. * * * 20 1 20 206.176(b) .......................... How do I perform accounting for comparison? (b) If you are required to account for comparison, you may elect to use the alternative dual accounting methodology provided for in § 206.173 instead of the provisions in paragraph (a) of this section. Burden covered under § 206.173(a)(1). 206.176(c) ........................... (c) * * * If you do not perform dual accounting, you must certify to MMS that gas flows into such a pipeline before it is processed. Burden covered under § 206.172(b)(1)(ii). Burden covered under OMB Control Number 1010–0140. Transportation Allowances What general requirements regarding transportation allowances apply to me? (c)(2) If you ask MMS, MMS may approve a transportation allowance deduction in excess of the limitation in paragraph (c)(1) of this section. * * * (3) Your application for exception (using Form MMS–4393, Request to Exceed Regulatory Allowance Limitation) must contain all relevant and supporting documentation necessary for MMS to make a determination. 4 1 4 206.178(a)(1)(i) ................... How do I determine a transportation allowance? (a) Determining a transportation allowance under an arm’slength contract. (1)(i) * * * You are required to submit to MMS a copy of your arm’s-length transportation contract(s) and all subsequent amendments to the contract(s) within 2 months of the date MMS receives your report which claims the allowance on the Form MMS–2014. 1 25 25 206.178(a)(1)(iii) ................. (a) Determining a transportation allowance under an arm’slength contract. (1)(iii) If MMS determines that the consideration paid under an arm’s-length transportation contract does not reflect the value of the transportation because of misconduct by or between the contracting parties * * * In these circumstances, MMS will notify you and give you an opportunity to provide written information justifying your transportation costs. AUDIT PROCESS. See note. 206.178(a)(2)(i) and (ii) ....... mstockstill on PROD1PC66 with NOTICES 206.177(c)(2) and (c)(3) ..... (a) Determining a transportation allowance under an arm’slength contract. (2)(i) * * * you cannot take an allowance for the costs of transporting lease production that is not royalty bearing without MMS approval, or without lessor approval on tribal leases. (ii) As an alternative to paragraph (a)(2)(i) of this section, you may propose to MMS a cost allocation method based on the values of the products transported. * * * 1 20 VerDate Aug<31>2005 19:39 Jul 31, 2008 Jkt 214001 PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 E:\FR\FM\01AUN1.SGM 20 01AUN1 45062 Federal Register / Vol. 73, No. 149 / Friday, August 1, 2008 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Average number of annual responses Annual burden hours 40 1 40 (b) Determining a transportation allowance under a non-arm’slength contract or no contract. (1)(ii) * * * You must submit the actual cost information to support the allowance to MMS on Form MMS–4295, Gas Transportation Allowance Report, within 3 months after the end of the 12-month period to which the allowance applies. * * * 15 3 45 206.178(b)(2)(iv) ................. (b) Determining a transportation allowance under a non-arm’slength contract or no contract. (2)(iv) You may use either depreciation with a return on undepreciated capital investment or a return on depreciable capital investment. * * * you may not later elect to change to the other alternative without MMS approval. 20 1 20 206.178(b)(2)(iv)(A) ............ (b) Determining a transportation allowance under a non-arm’slength contract or no contract. (2)(iv)(A) * * * Once you make an election, you may not change methods without MMS approval. * * * 20 1 20 206.178(b)(3)(i) ................... (b) Determining a transportation allowance under a non-arm’slength contract or no contract. (3)(i) * * * Except as provided in this paragraph, you may not take an allowance for transporting a product that is not royalty bearing without MMS approval. 40 1 40 206.178(b)(3)(ii) .................. (b) Determining a transportation allowance under a non-arm’slength contract or no contract. (3)(ii) As an alternative to the requirements of paragraph (b)(3)(i) of this section, you may propose to MMS a cost allocation method based on the values of the products transported. * * * 20 1 20 206.178(b)(5) ...................... (b) Determining a transportation allowance under a non-arm’slength contract or no contract. (5) If you transport both gaseous and liquid products through the same transportation system, you must propose a cost allocation procedure to MMS. * * * You are required to submit all relevant data to support your proposal. * * * 40 1 40 206.178(d)(1) ...................... (d) Reporting your transportation allowance. (1) If MMS requests, you must submit all data used to determine your transportation allowance * * * AUDIT PROCESS. See note. 206.178(d)(2), (e), and (f)(1) (d) Reporting your transportation allowance. (2) You must report transportation allowances as a separate entry on Form MMS–2014. * * * (e) Adjusting incorrect allowances. If for any month the transportation allowance you are entitled to is less than the amount you took on Form MMS–2014, you are required to report and pay additional royalties due, plus interest computed under 30 CFR 218.54 from the first day of the first month you deducted the improper transportation allowance until the date you pay the royalties due. * * * (f) Determining allowable costs for transportation allowances. * * * (1) Firm demand charges paid to pipelines. * * * You must modify the Form MMS–2014 by the amount received or credited for the affected reporting period. Burden covered under OMB Control Number 1010–0140. Burden covered under § 210.52. Reporting and recordkeeping requirement 206.178(a)(3)(i) and (ii) ....... (a) Determining a transportation allowance under an arm’slength contract. (3)(i) If your arm’s-length transportation contract includes both gaseous and liquid products and the transportation costs attributable to each cannot be determined from the contract, you must propose an allocation procedure to MMS. * * * (ii) You are required to submit all relevant data to support your allocation proposal. * * * 206.178(b)(1)(ii) .................. mstockstill on PROD1PC66 with NOTICES 30 CFR VerDate Aug<31>2005 19:39 Jul 31, 2008 Jkt 214001 PO 00000 Frm 00106 Fmt 4703 Sfmt 4703 Hour burden E:\FR\FM\01AUN1.SGM 01AUN1 45063 Federal Register / Vol. 73, No. 149 / Friday, August 1, 2008 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued 30 CFR Reporting and recordkeeping requirement Average number of annual responses Hour burden Annual burden hours 15 15 Processing Allowances How do I determine an actual processing allowance? (a) Determining a processing allowance if you have an arm’slength processing contract. (1)(i) * * * You have the burden of demonstrating that your contract is arm’s-length. You are required to submit to MMS a copy of your arm’s-length contract(s) and all subsequent amendments to the contract(s) within 2 months of the date MMS receives your first report that deducts the allowance on the Form MMS–2014. 1 206.180(a)(1)(iii) ................. (a) Determining a processing allowance if you have an arm’slength processing contract. (1)(iii) If MMS determines that the consideration paid under an arm’s-length processing contract does not reflect the value of the processing because of misconduct by or between the contracting parties * * * In these circumstances, MMS will notify you and give you an opportunity to provide written information justifying your processing costs. AUDIT PROCESS. See note. 206.180(a)(3) ...................... (a) Determining a processing allowance if you have an arm’slength processing contract. (3) If your arm’s-length processing contract includes more than one gas plant product and the processing costs attributable to each product cannot be determined from the contract, you must propose an allocation procedure to MMS. * * * You are required to submit all relevant data to support your proposal. * * * 40 1 40 206.180(b)(1)(ii) .................. (b) Determining a processing allowance if you have a nonarm’s-length contract or no contract. (1)(ii) * * * You must submit the actual cost information to support the allowance to MMS on Form MMS–4109, Gas Processing Allowance Summary Report, within 3 months after the end of the 12-month period for which the allowance applies. * * * 20 5 100 206.180(b)(2)(iv) ................. (b) Determining a processing allowance if you have a nonarm’s-length contract or no contract. (2)(iv) You may use either depreciation with a return on undepreciable capital investment or a return on depreciable capital investment.* * * you may not later elect to change to the other alternative without MMS approval. 20 1 20 206.180(b)(2)(iv)(A) ............ (b) Determining a processing allowance if you have a nonarm’s-length contract or no contract. (2)(iv)(A) * * * Once you make an election, you may not change methods without MMS approval. * * * 20 1 20 206.180(b)(3) ...................... (b) Determining a processing allowance if you have a nonarm’s-length contract or no contract. (3) Your processing allowance under this paragraph (b) must be determined based upon a calendar year or other period if you and MMS agree to an alternative. 20 1 20 206.180(c)(1) ...................... mstockstill on PROD1PC66 with NOTICES 206.180(a)(1)(i) ................... (c) Reporting your processing allowance. (1) If MMS requests, you must submit all data used to determine your processing allowance. * * * VerDate Aug<31>2005 19:39 Jul 31, 2008 Jkt 214001 PO 00000 Frm 00107 Fmt 4703 Sfmt 4703 AUDIT PROCESS. See note. E:\FR\FM\01AUN1.SGM 01AUN1 45064 Federal Register / Vol. 73, No. 149 / Friday, August 1, 2008 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued 30 CFR Reporting and recordkeeping requirement Hour burden 206.180(c)(2) and (d) .......... (c) Reporting your processing allowance. (2) You must report gas processing allowances as a separate entry on the Form MMS–2014. * * * (d) Adjusting incorrect processing allowances. If for any month the gas processing allowance you are entitled to is less than the amount you took on Form MMS–2014, you are required to pay additional royalties, plus interest computed under 30 CFR 218.54 from the first day of the first month you deducted a processing allowance until the date you pay the royalties due. * * * 206.181(c) ........................... How do I establish processing costs for dual accounting purposes when I do not process the gas? (c) A proposed comparable processing fee submitted to either the tribe and MMS (for tribal leases) or MMS (for allotted leases) with your supporting documentation submitted to MMS. If MMS does not take action on your proposal within 120 days, the proposal will be deemed to be denied and subject to appeal to the MMS Director under 30 CFR part 290. Average number of annual responses Annual burden hours Burden covered under OMB Control Number 1010–0140. Burden covered under § 210.52. 40 1 40 140 1,074 207—SALES AGREEMENTS OR CONTRACTS GOVERNING THE DISPOSAL OF LEASE PRODUCTS Subpart A—General Provisions 207.4(b) ............................... Contracts made pursuant to old form leases. (b) The stipulation, the substance of which must be included in the contract, or be made the subject matter of a separate instrument properly identifying the leases affected thereby, is as follows: * * * AUDIT PROCESS. See note. 207.5 ................................... Contract and sales agreement retention. Copies of all sales contracts, posted price bulletins, etc., and copies of all agreements, other contracts, or other documents which are relevant to the valuation of production are to be maintained by the lessee and made available upon request during normal working hours to authorized MMS, State or Indian representatives, other MMS or BLM officials, auditors of the General Accounting Office, or other persons authorized to receive such documents, or shall be submitted to MMS within a reasonable period of time, as determined by MMS. Any oral sales arrangement negotiated by the lessee must be placed in written form and retained by the lessee. Records shall be retained in accordance with 30 CFR part 212. AUDIT PROCESS. See note. Total Burden ................................................................................................................................................... mstockstill on PROD1PC66 with NOTICES Note: AUDIT PROCESS—The Office of Regulatory Affairs determined that the audit process is exempt from the Paperwork Reduction Act of 1995 because MMS staff asks non-standard questions to resolve exceptions. Estimated Annual Reporting and Recordkeeping ‘‘Non-hour’’ Cost Burden: We have identified no ‘‘nonhour’’ cost burdens. Public Disclosure Statement: The PRA (44 U.S.C. 3501 et seq.) provides that an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. Comments: Before submitting an ICR to OMB, PRA Section 3506(c)(2)(A) requires each agency ‘‘* * * to provide notice * * * and otherwise consult with members of the public and affected agencies concerning each proposed VerDate Aug<31>2005 19:39 Jul 31, 2008 Jkt 214001 collection of information * * *.’’ Agencies must specifically solicit comments to: (a) Evaluate whether the proposed collection of information is necessary for the agency to perform its duties, including whether the information is useful; (b) evaluate the accuracy of the agency’s estimate of the burden of the proposed collection of information; (c) enhance the quality, usefulness, and clarity of the information to be collected; and (d) minimize the burden on the respondents, including the use of automated collection techniques or other forms of information technology. PO 00000 Frm 00108 Fmt 4703 Sfmt 4703 The PRA also requires agencies to estimate the total annual reporting ‘‘non-hour cost’’ burden to respondents or recordkeepers resulting from the collection of information. If you have costs to generate, maintain, and disclose this information, you should comment and provide your total capital and startup cost components or annual operation, maintenance, and purchase of service components. 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. E:\FR\FM\01AUN1.SGM 01AUN1 Federal Register / Vol. 73, No. 149 / Friday, August 1, 2008 / Notices Capital and startup costs include, among other items, computers and software you purchase to prepare for collecting information; monitoring, sampling, and testing equipment; and record storage facilities. Generally, your estimates should not include equipment or services purchased: (i) Before October 1, 1995; (ii) to comply with requirements not associated with the information collection; (iii) for reasons other than to provide information or keep records for the Government; or (iv) as part of customary and usual business or private practices. We will summarize written responses to this notice and address them in our ICR submission for OMB approval, including appropriate adjustments to the estimated burden. We will provide a copy of the ICR to you without charge upon request. The ICR also will be posted at http://www.mrm.mms.gov/ Laws_R_D/FRNotices/FRInfColl.htm. Public Comment Policy: We will post all comments in response to this notice at http://www.mrm.mms.gov/Laws_R_D/ FRNotices/FRInfColl.htm. We also will make copies of the comments available for public view, including names and addresses of respondents, during regular business hours at our offices in Lakewood, Colorado. Before including your address, phone number, e-mail address, or other personal identifying information in your comment, be advised 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 from public view your personal identifying information, we cannot guarantee that we will be able to do so. MMS Information Collection Clearance Officer: Arlene Bajusz (202) 208–7744. Dated: July 21, 2008. Richard J. Adamski, Acting Associate Director for Minerals Revenue Management. [FR Doc. E8–17730 Filed 7–31–08; 8:45 am] BILLING CODE 4310–MR–P DEPARTMENT OF THE INTERIOR mstockstill on PROD1PC66 with NOTICES Minerals Management Service Request for Comments on the Preparation of a 5-Year Outer Continental Shelf (OCS) Oil and Gas Leasing Program Minerals Management Service (MMS), Interior. AGENCY: ACTION: Request for Comments. VerDate Aug<31>2005 19:39 Jul 31, 2008 Jkt 214001 SUMMARY: Section 18 of the OCS Lands Act (43 U.S.C. 1344) requires the Department of the Interior to solicit information from interested and affected parties during the preparation of a 5year OCS oil and gas leasing program. The current 5-year program covers the period July 2007 to June 30, 2012. The Department’s MMS is soliciting information on whether to begin a new Program for mid-2010 to mid-2015 (approximate dates) to succeed the current one. Section 18 requires completion of a multi-step process of public consultation and analysis before the Secretary of the Interior may approve a new 5-Year Program. The section 18 process includes the following required steps: This initial solicitation of comments; development of a draft proposed program, a proposed program, a proposed final program; and Secretarial approval. If the decision is made to prepare a new 5-Year Program, the MMS will also prepare appropriate NEPA analysis documents. The public will have opportunities to comment on the draft proposed program, the draft EIS or other NEPA documents, and the proposed program. This Notice in particular requests comments on areas that are restricted from leasing by Congressional Moratoria but were removed from Presidential Withdrawal on July 14, 2008. DATES: The MMS must receive all comments and information by September 15, 2008. Public Comment Procedure The MMS will accept comments in one of two formats: By mail or our Internet commenting system. Please submit your comments using only one of these formats, and include full names and addresses. Comments submitted by other means may not be considered. We will not consider anonymous comments, and we will make available for inspection in their entirety all comments submitted by organizations and businesses, or by individuals identifying themselves as representatives of organizations and businesses. Our practice is to make comments, including the names and home addresses of respondents, available for public review. An individual commenter may ask that we withhold from the public record, his or her name, home address, or both, and we will honor such a request to the extent allowable by law. If you submit comments and desire that we withhold such information, you must so state prominently at the beginning of your submission. PO 00000 Frm 00109 Fmt 4703 Sfmt 4703 45065 Mail comments and information on the program to: Ms. Renee Orr, 5-Year Program Manager, Minerals Management Service (MS– 4010), 381 Elden Street, Herndon, Virginia 20170. Environmental comments and information relevant to oil and gas development on the OCS should be sent to: Mr. James F. Bennett, Chief, Branch of Environmental Assessment, Minerals Management Service (MS–4042), 381 Elden Street, Herndon, Virginia 20170. If you submit any privileged or proprietary information to be treated as confidential, please mark the envelope, ‘‘Contains Confidential Information’’. Internet: The MMS will accept comments submitted to our electronic public comment system. (Public Connect). This system can be accessed at http://www.mms.gov. We also will provide access to information concerning the 5-Year Program at the MMS Internet Web site (http:// www.mms.gov) and copies or summaries of comments we receive in response to this notice will be available in the MMS Public Connect database. FOR FURTHER INFORMATION CONTACT: Ms. Renee Orr, 5-Year Program Manager, at (703) 787–1215. SUPPLEMENTARY INFORMATION: The MMS requests comments from states; local and tribal governments; American Indian and Native Alaskan organizations; Federal agencies; environmental and fish and wildlife organizations; the oil and gas industry; other interested organizations; and other parties on whether to begin the preparation of a new 5-Year Program. MMS is seeking a wide range of information, including marine productivity, environmental sensitivity and resource assessment. The 5-Year Program enables the Federal Government, states, industry, and other interested parties to plan for steps proposed to lead to OCS oil and gas lease sales. The Department will make a decision on whether to proceed with a specific lease sale on the schedule, only after meeting all of the applicable requirements of the OCS Lands Act, the National Environmental Policy Act (NEPA), and other statutes. The OCS is a significant source of oil and gas for the Nation’s energy supply. On a per day basis, the OCS currently produces about 1.35 million barrels of oil and almost 8 billion cubic feet of natural gas. This represents approximately 27 percent of domestic oil production and 15 percent of natural gas production. The MMS’s oversight and regulatory frameworks ensure production and ADDRESSES: E:\FR\FM\01AUN1.SGM 01AUN1

Agencies

[Federal Register Volume 73, Number 149 (Friday, August 1, 2008)]
[Notices]
[Pages 45055-45065]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-17730]


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

DEPARTMENT OF THE INTERIOR

Minerals Management Service

[Docket No. MMS-2008-MRM-0029]


Agency Information Collection Activities: Proposed Collection, 
Comment Request

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Notice of an extension of a currently approved information 
collection (OMB Control Number 1010-0103).

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

SUMMARY: To comply with the Paperwork Reduction Act of 1995 (PRA), we 
are inviting comments on a collection of information that we will 
submit to the Office of Management and Budget (OMB) for review and 
approval. We changed the title of this information collection request 
(ICR) to meet OMB requirements. The new title of this ICR is ``30 CFR 
Parts 202, 206, and 207, Indian Oil and Gas Valuation.''

DATES: Submit written comments on or before September 2, 2008.

ADDRESSES: You may submit comments by the following methods:
     Electronically go to http://www.regulations.gov. In the 
``Comment or Submission'' column, enter ``MMS-2008-MRM-0029'' to view 
supporting and related materials for this ICR. Click on ``Send a 
comment or submission'' link to submit public comments. 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 submitted will be posted to the docket.
     Mail comments to Hyla Hurst, Regulatory Specialist, 
Minerals Management Service, Minerals Revenue Management, P.O. Box 
25165, MS 302B2, Denver, Colorado 80225. Please reference ICR 1010-0103 
in your comments.
     Hand-carry comments or use an overnight courier service. 
Our courier address is Building 85, Room A-614, Denver Federal Center, 
West 6th Ave. and Kipling Blvd., Denver, Colorado 80225. Please 
reference ICR 1010-0103 in your comments.

FOR FURTHER INFORMATION CONTACT: Hyla Hurst, telephone (303) 231-3495, 
or e-mail Hyla.Hurst@mms.gov. You may also contact Hyla Hurst to obtain 
copies, at no cost, of (1) The ICR, (2) any associated forms, and (3) 
the regulations that require the subject collection of information.

SUPPLEMENTARY INFORMATION:
    Title: 30 CFR Parts 202, 206, and 207, Indian Oil and Gas 
Valuation.
    OMB Control Number: 1010-0103.
    Bureau Form Number: Forms MMS-4109, MMS-4110, MMS-4295, MMS-4410, 
and MMS-4411.
    Abstract: The Secretary of the U.S. Department of the Interior 
(Secretary) is responsible for matters relevant to mineral resource 
development on Federal and Indian lands and the Outer Continental Shelf 
(OCS). Under the Mineral Leasing Act (30 U.S.C. 1923), the Indian 
Mineral Development Act of 1982 (25 U.S.C. 2103), and the Outer 
Continental Shelf Lands Act (43 U.S.C. 1353), the Secretary is 
responsible for (1) Managing the production of minerals from Federal 
and Indian lands and the OCS; (2) collecting royalties and other 
mineral revenues from lessees who produce minerals; and (3) 
distributing the funds collected in accordance with applicable laws. 
The Secretary also has a trust responsibility to manage Indian lands 
and seek advice and information from Indian beneficiaries. The MMS 
performs the minerals revenue management functions and assists the 
Secretary in carrying out the Department's trust responsibility for 
Indian lands. Applicable laws pertaining to mineral royalties are 
located on our Web site at http://www.mrm.mms.gov/Laws_R_D/
PublicLawsAMR.htm.
    Regulations at 30 CFR part 202, subparts C and J, pertain to 
royalties; part 206, subparts B and E, govern the valuation of oil and 
gas produced from leases on Indian lands; and part 207 pertains to 
recordkeeping. Indian tribes and individual Indian mineral owners 
receive all royalties generated from their lands. Determining product 
valuation is essential to ensure that Indian tribes and individual 
Indian mineral owners receive payment on the full value of the minerals 
removed from their lands. Failure to collect the data described in this 
information collection could result in the undervaluation of leased 
minerals on Indian lands. All data reported is subject to subsequent 
audit and adjustment.

Indian Oil

    The regulations apply to all oil production from Indian oil and gas 
leases, except leases on the Osage Indian Reservation. The regulations 
provide that lessees determine the value of oil based on the higher of: 
(1) The gross proceeds under an arm's-length contract, or (2) major 
portion analysis. These oil valuation methods are eligible for 
applicable transportation allowances. From information collected

[[Page 45056]]

on Form MMS-4110, Oil Transportation Allowance Report, MMS verifies 
transportation allowances during the product valuation verification to 
determine if the lessee reported and paid the proper royalty amount. 
The MMS and tribal personnel evaluate whether the transportation 
allowances reported and claimed by lessees are within regulatory 
allowance limitations.

Indian Gas

    The regulations apply to all gas production from Indian oil and gas 
leases, except leases on the Osage Indian Reservation. Most Indian 
leases contain the requirement to perform accounting for comparison 
(dual accounting) for gas produced from the lease. Lessees must elect 
to perform actual dual accounting as defined in 30 CFR 206.176 or 
alternative dual accounting as defined in 30 CFR 206.173. Lessees use 
Form MMS-4410, Accounting for Comparison [Dual Accounting], to certify 
that dual accounting is not required on an Indian lease or to make an 
election for actual or alternative dual accounting for Indian leases.
    The regulations require lessees to submit Form MMS-4411, Safety Net 
Report, when gas production from an Indian oil or gas lease is sold 
beyond the first index pricing point. The safety net calculation 
establishes the minimum value, for royalty purposes, of natural gas 
production from Indian oil and gas leases. This reporting requirement 
ensures that Indian lessors receive all royalties due and aids MMS 
compliance efforts.
    The MMS and tribal personnel use the information collected on Form 
MMS-4295, Gas Transportation Allowance Report, to evaluate whether 
transportation allowances reported under a non-arm's-length contract or 
no contract are reasonable, and actual costs are within regulatory 
allowance limitations.
    The MMS and tribal personnel use the information collected on Form 
MMS-4109, Gas Processing Allowance Summary Report, to evaluate whether 
processing allowances reported under a non-arm's-length contract or no 
contract are reasonable, and actual costs are within regulatory 
allowance limitations.

Indian Oil and Gas

    Form MMS-4393, Request to Exceed Regulatory Allowance Limitation, 
is used for both Federal and Indian leases. Most of the burden hours 
are incurred on Federal leases; therefore, the form is approved under 
ICR 1010-0136, pertaining to Federal oil and gas leases. However, we 
include a discussion of the form in this ICR, as well as the burden 
hours for Indian leases. To request permission to exceed a regulatory 
allowance limit, lessees must submit a letter to MMS explaining why a 
higher allowance limit is necessary and provide supporting 
documentation, including a completed Form MMS-4393. This form provides 
MMS with the data necessary to make a decision whether to approve or 
deny the request and track deductions on royalty reports.

Summary

    The MMS is requesting OMB's approval to continue to collect this 
information. Not collecting this information would limit the 
Secretary's ability to discharge his/her duties and may also result in 
loss of royalty payments to Indian tribes and individual Indian mineral 
owners. Proprietary information submitted to MMS under this collection 
is protected, and no items of a sensitive nature are collected. The 
requirement to respond is mandatory for Form MMS-4411, Safety Net 
Report, when certain circumstances exist. For all other forms in this 
collection, the requirement to respond is voluntary; i.e., a response 
is required to obtain a benefit.
    Frequency of Response: Annually and on occasion.
    Estimated Number and Description of Respondents: 302 Indian 
lessees.
    Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 1,074 
hours.
    We have not included in our estimates certain requirements 
performed in the normal course of business and considered usual and 
customary. The following chart shows the estimated burden hours by CFR 
section and paragraph:

                                   Respondents' Estimated Annual Burden Hours
----------------------------------------------------------------------------------------------------------------
                                               Reporting and                      Average number
                 30 CFR                        recordkeeping        Hour burden      of annual     Annual burden
                                                requirement                          responses         hours
----------------------------------------------------------------------------------------------------------------
                                                 202--ROYALTIES
                                        Subpart C--Federal and Indian Oil
----------------------------------------------------------------------------------------------------------------
202.101.................................  Standards for           Burden covered under OMB Control Number 1010-
                                           reporting and paying   0140 (expires 11/30/2009). Burden covered
                                           royalties.             under Sec.   210.52.
                                          Oil volumes are to be
                                           reported in barrels
                                           of clean oil of 42
                                           standard U.S. gallons
                                           (231 cubic inches
                                           each) at 60 [deg]F. *
                                           * *
----------------------------------------------------------------------------------------------------------------
                                  Subpart J--Gas Production From Indian Leases
----------------------------------------------------------------------------------------------------------------
202.551(b)..............................  How do I determine the  Burden covered under OMB Control Number 1010-
                                           volume of production   0140. Burden covered under Sec.   210.52.
                                           for which I must pay
                                           royalty if my lease
                                           is not in an approved
                                           Federal unit or
                                           communitization
                                           agreement (AFA)?
                                          (b) You and all other
                                           persons paying
                                           royalties on the
                                           lease must report and
                                           pay royalties based
                                           on your takes. * * *
----------------------------------------------------------------------------------------------------------------
202.551(c)..............................  (c) You and all other                1               1               1
                                           persons paying
                                           royalties on the
                                           lease may ask MMS for
                                           permission * * *
----------------------------------------------------------------------------------------------------------------
202.558(a) and (b)......................  What standards do I     Burden covered under OMB Control Number 1010-
                                           use to report and pay  0140. Burden covered under Sec.   210.52.
                                           royalties on gas?
                                          (a) You must report
                                           gas volumes as
                                           follows: * * *
                                          (b) You must report
                                           residue gas and gas
                                           plant product volumes
                                           as follows: * * *
----------------------------------------------------------------------------------------------------------------

[[Page 45057]]

 
                                             206--PRODUCT VALUATION
                                              Subpart B--Indian Oil
----------------------------------------------------------------------------------------------------------------
206.56(b)(2)............................  Transportation          Burden covered under OMB Control Number 1010-
                                           allowances--general.   0136 (expires 06/30/2009).
                                          (b)(2) Upon request of
                                           a lessee, MMS may
                                           approve a
                                           transportation
                                           allowance deduction
                                           in excess of the
                                           limitation prescribed
                                           by paragraph (b)(1)
                                           of this section. * *
                                           * An application for
                                           exception (using Form
                                           MMS-4393, Request to
                                           Exceed Regulatory
                                           Allowance Limitation)
                                           must contain all
                                           relevant and
                                           supporting
                                           documentation
                                           necessary for MMS to
                                           make a determination.
                                           * * *
----------------------------------------------------------------------------------------------------------------
206.57(a)(1)(i).........................  Determination of        AUDIT PROCESS. See note.
                                           transportation
                                           allowances.
                                          (a) Arm's-length
                                           transportation
                                           contracts.
                                          (1)(i) * * * The
                                           lessee shall have the
                                           burden of
                                           demonstrating that
                                           its contract is arm's-
                                           length.
----------------------------------------------------------------------------------------------------------------
206.57(a)(1)(i).........................  (a) Arm's-length        Burden covered under Sec.   206.57(c)(1)(i)
                                           transportation         and (iii).
                                           contracts.
                                          (1)(i) * * * Before
                                           any deduction may be
                                           taken, the lessee
                                           must submit a
                                           completed page one of
                                           Form MMS-4110 (and
                                           Schedule 1), Oil
                                           Transportation
                                           Allowance Report * *
                                           *
----------------------------------------------------------------------------------------------------------------
206.57(a)(1)(iii).......................  (a) Arm's-length        AUDIT PROCESS. See note.
                                           transportation
                                           contracts.
                                          (1)(iii) * * * When
                                           MMS determines that
                                           the value of the
                                           transportation may be
                                           unreasonable, MMS
                                           will notify the
                                           lessee and give the
                                           lessee an opportunity
                                           to provide written
                                           information
                                           justifying the
                                           lessee's
                                           transportation costs.
----------------------------------------------------------------------------------------------------------------
206.57(a)(2)(i).........................  (a) Arm's-length        Burden covered under Sec.   206.57(a)(3).
                                           transportation
                                           contracts.
                                          (2)(i) * * * Except as
                                           provided in this
                                           paragraph, no
                                           allowance may be
                                           taken for the costs
                                           of transporting lease
                                           production which is
                                           not royalty-bearing
                                           without MMS approval.
----------------------------------------------------------------------------------------------------------------
206.57(a)(2)(ii)........................  (a) Arm's-length                    20               1              20
                                           transportation
                                           contracts.
                                          (2)(ii)
                                           Notwithstanding the
                                           requirements of
                                           paragraph (i), the
                                           lessee may propose to
                                           MMS a cost allocation
                                           method on the basis
                                           of the values of the
                                           products transported.
                                           * * *
----------------------------------------------------------------------------------------------------------------
206.57(a)(3)............................  (a) Arm's-length                    40               1              40
                                           transportation
                                           contracts.
                                          (3) If an arm's-length
                                           transportation
                                           contract includes
                                           both gaseous and
                                           liquid products, and
                                           the transportation
                                           costs attributable to
                                           each product cannot
                                           be determined from
                                           the contract, the
                                           lessee shall propose
                                           an allocation
                                           procedure to MMS. * *
                                           * The lessee shall
                                           submit all available
                                           data to support its
                                           proposal. * * *
----------------------------------------------------------------------------------------------------------------
206.57(b)(1)............................  (b) Non-arm's-length    Burden covered under Sec.   206.57(c)(2)(i),
                                           or no contract.        and (c)(2)(iii).
                                          (1) * * * A
                                           transportation
                                           allowance may be
                                           claimed retroactively
                                           for a period of not
                                           more than 3 months
                                           prior to the first
                                           day of the month that
                                           Form MMS-4110 is
                                           filed with MMS,
                                           unless MMS approves a
                                           longer period upon a
                                           showing of good cause
                                           by the lessee. * * *
----------------------------------------------------------------------------------------------------------------
206.57(b)(1)............................  (b) Non-arm's-length    Burden covered under OMB Control Number 1010-
                                           or no contract.        0140. Burden covered under Sec.   210.52.
                                          (1) * * * When
                                           necessary or
                                           appropriate, MMS may
                                           direct a lessee to
                                           modify its actual
                                           transportation
                                           allowance deduction.
----------------------------------------------------------------------------------------------------------------
206.57(b)(2)(iv)........................  (b) Non-arm's-length                20               1              20
                                           or no contract.
                                          (2)(iv) * * * After a
                                           lessee has elected to
                                           use either method for
                                           a transportation
                                           system, the lessee
                                           may not later elect
                                           to change to the
                                           other alternative
                                           without approval of
                                           MMS.
----------------------------------------------------------------------------------------------------------------
206.57(b)(2)(iv)(A).....................  (b) Non-arm's-length                20               1              20
                                           or no contract.
                                          (2)(iv)(A) * * * After
                                           an election is made,
                                           the lessee may not
                                           change methods
                                           without MMS approval.
                                           * * *
----------------------------------------------------------------------------------------------------------------

[[Page 45058]]

 
206.57(b)(3)(i).........................  (b) Non-arm's-length                40               1              40
                                           or no contract.
                                          (3)(i) * * * Except as
                                           provided in this
                                           paragraph, the lessee
                                           may not take an
                                           allowance for
                                           transporting lease
                                           production which is
                                           not royalty bearing
                                           without MMS approval.
----------------------------------------------------------------------------------------------------------------
206.57(b)(3)(ii)........................  (b) Non-arm's-length                20               1              20
                                           or no contract.
                                          (3)(ii)
                                           Notwithstanding the
                                           requirements of
                                           paragraph (i), the
                                           lessee may propose to
                                           MMS a cost allocation
                                           method on the basis
                                           of the values of the
                                           products transported.
                                           * * *
----------------------------------------------------------------------------------------------------------------
206.57(b)(4)............................  (b) Non-arm's-length                20               1              20
                                           or no contract.
                                          (4) Where both gaseous
                                           and liquid products
                                           are transported
                                           through the same
                                           transportation
                                           system, the lessee
                                           shall propose a cost
                                           allocation procedure
                                           to MMS. * * * The
                                           lessee shall submit
                                           all available data to
                                           support its proposal.
                                           * * *
----------------------------------------------------------------------------------------------------------------
206.57(b)(5)............................  (b) Non-arm's-length                20               1              20
                                           or no contract.
                                          (5) A lessee may apply
                                           to MMS for an
                                           exception from the
                                           requirement that it
                                           compute actual costs
                                           in accordance with
                                           paragraphs (b)(1)
                                           through (b)(4) of
                                           this section. * * *
----------------------------------------------------------------------------------------------------------------
206.57(c)(1)(i).........................  (c) Reporting                        4               4              16
                                           requirements.
                                          (1) Arm's-length
                                           contracts. (i) With
                                           the exception of
                                           those transportation
                                           allowances specified
                                           in paragraphs
                                           (c)(1)(v) and
                                           (c)(1)(vi) of this
                                           section, the lessee
                                           shall submit page one
                                           of the initial Form
                                           MMS-4110 (and
                                           Schedule 1), Oil
                                           Transportation
                                           Allowance Report,
                                           prior to, or at the
                                           same time as, the
                                           transportation
                                           allowance determined,
                                           under an arm's-length
                                           contract, is reported
                                           on Form MMS-2014,
                                           Report of Sales and
                                           Royalty Remittance. *
                                           * *
----------------------------------------------------------------------------------------------------------------
206.57(c)(1)(iii).......................  (c) Reporting                        4               4              16
                                           requirements.
                                          (1) Arm's-length
                                           contracts. (iii)
                                           After the initial
                                           reporting period and
                                           for succeeding
                                           reporting periods,
                                           lessees must submit
                                           page one of Form MMS-
                                           4110 (and Schedule 1)
                                           within 3 months after
                                           the end of the
                                           calendar year, or
                                           after the applicable
                                           contract or rate
                                           terminates or is
                                           modified or amended,
                                           whichever is earlier,
                                           unless MMS approves a
                                           longer period (during
                                           which period the
                                           lessee shall continue
                                           to use the allowance
                                           from the previous
                                           reporting period).
----------------------------------------------------------------------------------------------------------------
206.57(c)(1)(iv)........................  (c) Reporting           AUDIT PROCESS. See note.
                                           requirements.
                                          (1) Arm's-length
                                           contracts. (iv) MMS
                                           may require that a
                                           lessee submit arm's-
                                           length transportation
                                           contracts, production
                                           agreements, operating
                                           agreements, and
                                           related documents.
                                           Documents shall be
                                           submitted within a
                                           reasonable time, as
                                           determined by MMS.
----------------------------------------------------------------------------------------------------------------
206.57(c)(2)(i).........................  (c) Reporting                        6               1               6
                                           requirements.
                                          (2) Non-arm's-length
                                           or no contract.
                                          (i) With the exception
                                           of those
                                           transportation
                                           allowances specified
                                           in paragraphs
                                           (c)(2)(v),
                                           (c)(2)(vii) and
                                           (c)(2)(viii) of this
                                           section, the lessee
                                           shall submit an
                                           initial Form MMS-4110
                                           prior to, or at the
                                           same time as, the
                                           transportation
                                           allowance determined
                                           under a non-arm's-
                                           length contract or no-
                                           contract situation is
                                           reported on Form MMS-
                                           2014. * * * The
                                           initial report may be
                                           based upon estimated
                                           costs.
----------------------------------------------------------------------------------------------------------------

[[Page 45059]]

 
206.57(c)(2)(iii).......................  (c) Reporting                        6               3              18
                                           requirements.
                                          (2) Non-arm's-length
                                           or no contract.
                                          (iii) For calendar-
                                           year reporting
                                           periods succeeding
                                           the initial reporting
                                           period, the lessee
                                           shall submit a
                                           completed Form MMS-
                                           4110 containing the
                                           actual costs for the
                                           previous reporting
                                           period. If oil
                                           transportation is
                                           continuing, the
                                           lessee shall include
                                           on Form MMS-4110 its
                                           estimated costs for
                                           the next calendar
                                           year. * * * MMS must
                                           receive the Form MMS-
                                           4110 within 3 months
                                           after the end of the
                                           previous reporting
                                           period, unless MMS
                                           approves a longer
                                           period (during which
                                           period the lessee
                                           shall continue to use
                                           the allowance from
                                           the previous
                                           reporting period).
----------------------------------------------------------------------------------------------------------------
206.57(c)(2)(iv)........................  (c) Reporting           Burden covered under Sec.   206.57(c)(2)(i).
                                           requirements.
                                          (2) Non-arm's-length
                                           or no contract.
                                          (iv) For new
                                           transportation
                                           facilities or
                                           arrangements, the
                                           lessee's initial Form
                                           MMS-4110 shall
                                           include estimates of
                                           the allowable oil
                                           transportation costs
                                           for the applicable
                                           period. * * *
----------------------------------------------------------------------------------------------------------------
206.57(c)(2)(v).........................  (c) Reporting           Burden covered under Sec.   206.57(c)(2)(i).
                                           requirements.
                                          (2) Non-arm's-length
                                           or no contract.
                                          (v) * * * only those
                                           allowances that have
                                           been approved by MMS
                                           in writing * * *
----------------------------------------------------------------------------------------------------------------
206.57(c)(2)(vi)........................  (c) Reporting           AUDIT PROCESS. See note.
                                           requirements.
                                          (2) Non-arm's-length
                                           or no contract.
                                          (vi) Upon request by
                                           MMS, the lessee shall
                                           submit all data used
                                           to prepare its Form
                                           MMS-4110. The data
                                           shall be provided
                                           within a reasonable
                                           period of time, as
                                           determined by MMS.
----------------------------------------------------------------------------------------------------------------
206.57(c)(4) and (e)(2).................  (c) Reporting           Burden covered under OMB Control Number 1010-
                                           requirements.          0140. Burden covered under Sec.   210.52.
                                          (4) Transportation
                                           allowances must be
                                           reported as a
                                           separate line item on
                                           Form MMS-2014 * * *
                                          (e) Adjustments.
                                          (2) For lessees
                                           transporting
                                           production from
                                           Indian leases, the
                                           lessee must submit a
                                           corrected Form MMS-
                                           2014 to reflect
                                           actual costs * * *
----------------------------------------------------------------------------------------------------------------
206.59..................................  May I ask MMS for                   20               1              20
                                           valuation guidance?
                                          You may ask MMS for
                                           guidance in
                                           determining value.
                                           You may propose a
                                           value method to MMS.
                                           Submit all available
                                           data related to your
                                           proposal and any
                                           additional
                                           information MMS deems
                                           necessary. * * *
----------------------------------------------------------------------------------------------------------------
206.61(a) and (b).......................  What records must I     AUDIT PROCESS. See note.
                                           keep and produce?
                                          (a) On request, you
                                           must make available
                                           sales, volume, and
                                           transportation data
                                           for production you
                                           sold, purchased, or
                                           obtained from the
                                           field or area. You
                                           must make this data
                                           available to MMS,
                                           Indian
                                           representatives, or
                                           other authorized
                                           persons.
                                          (b) You must retain
                                           all data relevant to
                                           the determination of
                                           royalty value. * * *
----------------------------------------------------------------------------------------------------------------
                                             206--PRODUCT VALUATION
                                              Subpart E--Indian Gas
----------------------------------------------------------------------------------------------------------------
206.172(b)(1)(ii).......................  How do I value gas                   4              25             100
                                           produced from leases
                                           in an index zone?
                                          (b) Valuing residue
                                           gas and gas before
                                           processing.
                                          (1)(ii) Gas production
                                           that you certify on
                                           Form MMS-4410 * * *
                                           is not processed
                                           before it flows into
                                           a pipeline with an
                                           index but which may
                                           be processed later *
                                           * *
----------------------------------------------------------------------------------------------------------------

[[Page 45060]]

 
206.172(e)(6)(i) and (iii)..............  (e) Determining the                  3              10              30
                                           minimum value for
                                           royalty purposes of
                                           gas sold beyond the
                                           first index pricing
                                           point.
                                          (6)(i) You must report
                                           the safety net price
                                           for each index zone
                                           to MMS on Form MMS-
                                           4411, Safety Net
                                           Report, no later than
                                           June 30 following
                                           each calendar year; *
                                           * *
                                          (iii) MMS may order
                                           you to amend your
                                           safety net price
                                           within one year from
                                           the date your Form
                                           MMS-4411 is due or is
                                           filed, whichever is
                                           later. * * *
----------------------------------------------------------------------------------------------------------------
206.172(e)(6)(ii).......................  (e) Determining the     Burden covered under OMB Control Number 1010-
                                           minimum value for      0140. Burden covered under Sec.   210.52.
                                           royalty purposes of
                                           gas sold beyond the
                                           first index pricing
                                           point.
                                          (6)(ii) You must pay
                                           and report on Form
                                           MMS-2014 additional
                                           royalties due no
                                           later than June 30
                                           following each
                                           calendar year * * *
----------------------------------------------------------------------------------------------------------------
206.172(f)(1)(ii), (f)(2), and (f)(3)...  (f) Excluding some or               40               1              40
                                           all tribal leases
                                           from valuation under
                                           this section.
                                          (1) An Indian tribe
                                           may ask MMS to
                                           exclude some or all
                                           of its leases from
                                           valuation under this
                                           section. * * *
                                          (ii) If an Indian
                                           tribe requests
                                           exclusion from an
                                           index zone for less
                                           than all of its
                                           leases, MMS will
                                           approve the request
                                           only if the excluded
                                           leases may be
                                           segregated into one
                                           or more groups based
                                           on separate fields
                                           within the
                                           reservation.
                                          (2) An Indian tribe
                                           may ask MMS to
                                           terminate exclusion
                                           of its leases from
                                           valuation under this
                                           section. * * *
                                          (3) The Indian tribe's
                                           request to MMS under
                                           either paragraph
                                           (f)(1) or (2) of this
                                           section must be in
                                           the form of a tribal
                                           resolution. * * *
----------------------------------------------------------------------------------------------------------------
206.173(a)(1)...........................  How do I calculate the               2              19              38
                                           alternative
                                           methodology for dual
                                           accounting?
                                          (a) Electing a dual
                                           accounting method.
                                          (1) * * * You may
                                           elect to perform the
                                           dual accounting
                                           calculation according
                                           to either 206.176(a)
                                           (called actual dual
                                           accounting), or
                                           paragraph (b) of this
                                           section (called the
                                           alternative
                                           methodology for dual
                                           accounting).
----------------------------------------------------------------------------------------------------------------
206.173(a)(2)...........................  (a) Electing a dual     Burden covered under Sec.   206.173(a)(1).
                                           accounting method.
                                          (2) You must make a
                                           separate election to
                                           use the alternative
                                           methodology for dual
                                           accounting for your
                                           Indian leases in each
                                           MMS-designated area.
                                           * * *
----------------------------------------------------------------------------------------------------------------
206.174(a)(4)(ii).......................  How do I value gas      Burden covered under OMB Control Number 1010-
                                           production when an     0140. Burden covered under Sec.   210.52.
                                           index-based method
                                           cannot be used?
                                          (a) Situations in
                                           which an index-based
                                           method cannot be
                                           used.
                                          (4)(ii) If the major
                                           portion value is
                                           higher, you must
                                           submit an amended
                                           Form MMS-2014 to MMS
                                           by the due date
                                           specified in the
                                           written notice from
                                           MMS of the major
                                           portion value. * * *
----------------------------------------------------------------------------------------------------------------
206.174(b)(1)(i) and (iii); (b)(2);       (b) Arm's-length        AUDIT PROCESS. See note.
 (d)(2).                                   contracts.
                                          (1)(i) You have the
                                           burden of
                                           demonstrating that
                                           your contract is
                                           arm's-length. * * *
                                          (iii) * * * In these
                                           circumstances, MMS
                                           will notify you and
                                           give you an
                                           opportunity to
                                           provide written
                                           information
                                           justifying your
                                           value. * * *
                                          (2) MMS may require
                                           you to certify that
                                           your arm's-length
                                           contract provisions
                                           include all of the
                                           consideration the
                                           buyer pays, either
                                           directly or
                                           indirectly, for the
                                           gas, residue gas, or
                                           gas plant product.
                                          (d) Supporting data.
                                          (2) You must make all
                                           such data available
                                           upon request to the
                                           authorized MMS or
                                           Indian
                                           representatives, to
                                           the Office of the
                                           Inspector General of
                                           the Department, or
                                           other authorized
                                           persons. * * *
----------------------------------------------------------------------------------------------------------------

[[Page 45061]]

 
206.174(d)..............................  (d) Supporting data.    Burden covered under OMB Control Number 1010-
                                           If you determine the   0140.
                                           value of production
                                           under paragraph (c)
                                           of this section, you
                                           must retain all data
                                           relevant to
                                           determination of
                                           royalty value.
----------------------------------------------------------------------------------------------------------------
206.174(f)..............................  (f) Value guidance.                 40               1              40
                                           You may ask MMS for
                                           guidance in
                                           determining value.
                                           You may propose a
                                           valuation method to
                                           MMS. Submit all
                                           available data
                                           related to your
                                           proposal and any
                                           additional
                                           information MMS deems
                                           necessary. * * *
----------------------------------------------------------------------------------------------------------------
206.175(d)(4)...........................  How do I determine                  20               1              20
                                           quantities and
                                           qualities of
                                           production for
                                           computing royalties?
                                          (d)(4) You may request
                                           MMS approval of other
                                           methods for
                                           determining the
                                           quantity of residue
                                           gas and gas plant
                                           products allocable to
                                           each lease. * * *
----------------------------------------------------------------------------------------------------------------
206.176(b)..............................  How do I perform        Burden covered under Sec.   206.173(a)(1).
                                           accounting for
                                           comparison?
                                          (b) If you are
                                           required to account
                                           for comparison, you
                                           may elect to use the
                                           alternative dual
                                           accounting
                                           methodology provided
                                           for in Sec.   206.173
                                           instead of the
                                           provisions in
                                           paragraph (a) of this
                                           section.
----------------------------------------------------------------------------------------------------------------
206.176(c)..............................  (c) * * * If you do     Burden covered under Sec.   206.172(b)(1)(ii).
                                           not perform dual
                                           accounting, you must
                                           certify to MMS that
                                           gas flows into such a
                                           pipeline before it is
                                           processed.
----------------------------------------------------------------------------------------------------------------
                                            Transportation Allowances
----------------------------------------------------------------------------------------------------------------
206.177(c)(2) and (c)(3)................  What general                         4               1               4
                                           requirements
                                           regarding
                                           transportation
                                           allowances apply to
                                           me?
                                          (c)(2) If you ask MMS,
                                           MMS may approve a
                                           transportation
                                           allowance deduction
                                           in excess of the
                                           limitation in
                                           paragraph (c)(1) of
                                           this section. * * *
                                          (3) Your application
                                           for exception (using
                                           Form MMS-4393,
                                           Request to Exceed
                                           Regulatory Allowance
                                           Limitation) must
                                           contain all relevant
                                           and supporting
                                           documentation
                                           necessary for MMS to
                                           make a determination.
----------------------------------------------------------------------------------------------------------------
206.178(a)(1)(i)........................  How do I determine a                 1              25              25
                                           transportation
                                           allowance?
                                          (a) Determining a
                                           transportation
                                           allowance under an
                                           arm's-length
                                           contract.
                                          (1)(i) * * * You are
                                           required to submit to
                                           MMS a copy of your
                                           arm's-length
                                           transportation
                                           contract(s) and all
                                           subsequent amendments
                                           to the contract(s)
                                           within 2 months of
                                           the date MMS receives
                                           your report which
                                           claims the allowance
                                           on the Form MMS-2014.
----------------------------------------------------------------------------------------------------------------
206.178(a)(1)(iii)......................  (a) Determining a       AUDIT PROCESS. See note.
                                           transportation
                                           allowance under an
                                           arm's-length
                                           contract.
                                          (1)(iii) If MMS
                                           determines that the
                                           consideration paid
                                           under an arm's-length
                                           transportation
                                           contract does not
                                           reflect the value of
                                           the transportation
                                           because of misconduct
                                           by or between the
                                           contracting parties *
                                           * * In these
                                           circumstances, MMS
                                           will notify you and
                                           give you an
                                           opportunity to
                                           provide written
                                           information
                                           justifying your
                                           transportation costs.
----------------------------------------------------------------------------------------------------------------
206.178(a)(2)(i) and (ii)...............  (a) Determining a                   20               1              20
                                           transportation
                                           allowance under an
                                           arm's-length
                                           contract.
                                          (2)(i) * * * you
                                           cannot take an
                                           allowance for the