Agency Information Collection Activities: Proposed Collection, Comment Request, 76746-76757 [2011-31496]

Download as PDF 76746 Federal Register / Vol. 76, No. 236 / Thursday, December 8, 2011 / Notices developing and prioritizing the management goals and objectives for each refuge within the NWRS mission, and to determine how the public can use each refuge. The planning process is a way for us and the public to evaluate management goals and objectives that will ensure the best possible approach to wildlife, plant, and habitat conservation, while providing for wildlife-dependent recreation opportunities that are compatible with each refuge’s establishing purposes and the mission of the NWRS. mstockstill on DSK4VPTVN1PROD with NOTICES Refuge Overview DeSoto National Wildlife Refuge, established in 1958, encompasses 8,358 acres of floodplain habitat on a former oxbow of the Missouri River. The Refuge conserves prairie, wetland, open water, and riparian forest habitats important to migratory waterfowl and other wildlife. Twenty-five miles north of Omaha, Nebraska, DeSoto also provides recreational use for up to 250,000 visitors annually. The Refuge is renowned for housing the Steamboat Bertrand artifact collection, the largest assemblage of Civil War era artifacts in the United States. Public Involvement Our CCP process provides participation opportunities for Tribal, State, and local governments; agencies; organizations; and the public. We encourage input in the form of issues, concerns, ideas, and suggestions for the future management of the Desoto NWR. We also invite comments on archeological, historic, and traditional cultural sites in accordance with the National Historic Preservation Act of 1966 (16 U.S.C. 470 et seq.). We invite anyone interested to respond to the following two questions: 1. What issues do you want to see addressed in the CCP? 2. What improvements would you recommend for the Refuge? Responding to these two questions is optional; you are not required to provide information to us. Our planning team developed the questions to gather information about individual issues and ideas concerning the Refuge. Comments we receive will be used as part of the planning process; however, we will not reference individual comments in our reports or directly respond to them. We will also give the public an opportunity to provide input at open houses. You can obtain a schedule of the open house events by contacting the Refuge Manager listed in the ADDRESSES section of this notice. The environmental review of this project will be conducted in accordance VerDate Mar<15>2010 15:59 Dec 07, 2011 Jkt 226001 with the requirements of the National Environmental Policy Act of 1969, as amended (42 U.S.C. 4321 et seq.); NEPA Regulations (40 CFR parts 1500–1508); other appropriate Federal laws and regulations; and our policies and procedures for compliance with those regulations. Public Availability of Comments Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so. Charles M. Wooley, Acting Regional Director, Midwest Region, U.S. Fish and Wildlife Service. [FR Doc. 2011–31565 Filed 12–7–11; 8:45 am] BILLING CODE 4310–55–P DEPARTMENT OF THE INTERIOR Office of Natural Resources Revenue [Docket No. ONRR–2011–0021] Agency Information Collection Activities: Proposed Collection, Comment Request Office of Natural Resources Revenue (ONRR), Interior. ACTION: Notice of an extension of a currently approved information collection. AGENCY: To comply with the Paperwork Reduction Act of 1995 (PRA), we are inviting comments on a collection of information requests that we will submit to the Office of Management and Budget (OMB) for review and approval. The OMB formerly approved this information collection request (ICR) under OMB Control Number 1010–0103. After the Secretary of the Department of the Interior established ONRR (the former Minerals Revenue Management, a program under the Minerals Management Service) on October 1, 2010, OMB approved a new series number for ONRR and renumbered our ICRs. This ICR covers the paperwork requirements in the regulations under title 30, Code of Federal Regulations (CFR), parts 1202, 1206, and 1207 (previously 30 CFR parts 202, 206, and 207). The revised title of this ICR is ‘‘30 CFR Parts 1202, 1206, and 1207, Indian Oil and Gas Valuation.’’ There are five forms SUMMARY: PO 00000 Frm 00058 Fmt 4703 Sfmt 4703 associated with this information collection. Submit written comments on or before January 9, 2012. ADDRESSES: You may submit comments on this ICR to ONRR by any of the following methods. Please use ‘‘ICR 1012–0002’’ as an identifier in your comment. • Electronically go to http:// www.regulations.gov. In the entry titled ‘‘Enter Keyword or ID,’’ enter ‘‘ONRR– 2011–0021’’ and then click ‘‘Search.’’ Follow the instructions to submit public comments. The ONRR will post all comments. • Mail comments to Armand Southall, Regulatory Specialist, Office of Natural Resources, P.O. Box 25165, MS 64000A, Denver, Colorado 80225. Please reference ICR 1012–0002 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 St., Denver, Colorado 80225. Please reference ICR 1012–0002 in your comments. FOR FURTHER INFORMATION CONTACT: Armand Southall, telephone (303) 231– 3221, or email armand.southall@onrr.gov. You may also contact Mr. Southall 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. You may also review the information collection online at http:// www.reginfo.gov/public/PRAMain. SUPPLEMENTARY INFORMATION: Title: 30 CFR Parts 1202, 1206, and 1207, Indian Oil and Gas Valuation. OMB Control Number: 1012–0002. Bureau Form Number: Forms MMS– 4109, MMS–4110, MMS–4295, MMS– 4410, and MMS–4411. DATES: Note: The ONRR will publish a rule updating our form numbers to Forms ONRR– 4109, ONRR–4110, ONRR–4295, ONRR– 4410, and ONRR–4411. Abstract: The Secretary of the U.S. Department of the Interior is responsible for mineral resource development on Federal and Indian lands and the Outer Continental Shelf (OCS). The Secretary is required by various laws to manage mineral resource production on Federal and Indian lands and the OCS, collect the royalties and other mineral revenues due, and distribute the funds in accordance with those laws. Applicable laws pertaining to mineral leases on Federal and Indian lands and the OCS are posted on our Web site at http:// www.onrr.gov/Laws_R_D/ PublicLawsAMR.htm. E:\FR\FM\08DEN1.SGM 08DEN1 Federal Register / Vol. 76, No. 236 / Thursday, December 8, 2011 / Notices The Secretary also has a trust responsibility to manage Indian lands and seek advice and information from Indian beneficiaries. The ONRR performs the minerals revenue management functions and assists the Secretary in carrying out the Department’s trust responsibility for Indian lands. Indian Tribes and individual Indian mineral owners receive all royalties generated from their lands. Determining product valuation is essential to ensure that Indian Tribes and individual Indian mineral owners receive payment on the full value of the minerals removed from their lands. Failure to collect the data described in this information collection could result in the undervaluation of leased minerals on Indian lands. Effective October 1, 2010, ONRR reorganized and transferred their regulations from chapter II to chapter XII in title 30 of the Code of Federal Regulations (CFR), resulting in a change in our citations. Information collections covered in this ICR are found at 30 CFR part 1202, subparts C and J, which pertain to royalties; part 1206, subparts B and E, which govern the valuation of oil and gas produced from leases on Indian lands; and part 1207, which pertains to recordkeeping. All data reported is subject to subsequent audit and adjustment. mstockstill on DSK4VPTVN1PROD with NOTICES Indian Oil Regulations at 30 CFR part 1206, subpart B, govern the valuation for royalty purposes of all oil produced from Indian oil and gas leases (Tribal and allotted), except leases on the Osage Indian Reservation, and are consistent with mineral leasing laws, other applicable laws, and lease terms. Generally, the regulations provide that lessees determine the value of oil based upon the higher of (1) The gross proceeds under an arm’s-length contract; or (2) major portion analysis. The value determined by the lessee may be eligible for a transportation allowance. From information collected on Form MMS–4110, Oil Transportation Allowance Report, ONRR and Tribal audit personnel evaluate (1) Whether lessee-reported transportation allowances are within regulatory allowance limitations and calculated in VerDate Mar<15>2010 15:59 Dec 07, 2011 Jkt 226001 accordance with applicable regulations; and (2) whether the lessees reported and paid the proper amount of royalties. Indian Gas Regulations at 30 CFR part 1206, subpart E, govern the valuation for royalty purposes of natural gas produced from Indian oil and gas leases (Tribal and allotted). 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 1206.176 or alternative dual accounting as defined in 30 CFR 1206.173. 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 ONRR compliance efforts. From information collected on Form MMS–4295, Gas Transportation Allowance Report, ONRR and Tribal audit personnel evaluate (1) Whether lessee-reported transportation allowances are within regulatory allowance limitations and calculated in accordance with applicable regulations; and (2) whether the lessees reported and paid the proper amount of royalties. From information collected on Form MMS–4109, Gas Processing Allowance Summary Report, ONRR and Tribal audit personnel evaluate (1) whether lessee-reported processing allowances are within regulatory allowance limitations and calculated in accordance with applicable regulations; and (2) whether the lessees reported and paid the proper amount of royalties. PO 00000 Frm 00059 Fmt 4703 Sfmt 4703 76747 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, presently 1012–0005, 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 (1) submit a letter to ONRR explaining why a higher allowance limit is necessary; and (2) provide supporting documentation, including a completed Form MMS–4393. This form provides ONRR with the data necessary to make a decision whether to approve or deny the request and track deductions on royalty reports. OMB Approval The ONRR will request OMB’s approval to continue to collect this information. Not collecting this information would limit the Secretary’s ability to discharge fiduciary duties and may also result in the inability to confirm the accurate royalty value to Indian Tribes and individual Indian mineral owners. ONRR protects proprietary information it receives, and does not collect items of a sensitive nature. The requirement to respond is mandatory for Form MMS–4410, Accounting for Comparison [Dual Accounting], and Form MMS–4411, Safety Net Report, under certain circumstances. And, the lessees are required to submit Forms MMS–4109, MMS–4110, and MMS–4295 in order to obtain a benefit. Frequency of Response: Annually and on occasion. Estimated Number and Description of Respondents: 148 Indian lessees. Estimated Annual Reporting and Recordkeeping ‘‘Hour’’ Burden: 1,309 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: E:\FR\FM\08DEN1.SGM 08DEN1 76748 Federal Register / Vol. 76, No. 236 / Thursday, December 8, 2011 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS 30 CFR Reporting and recordkeeping requirement Average number of annual responses Hour burden Annual burden hours PART 1202—ROYALTIES Subpart C—Federal and Indian Oil 1202.101 ..................................... 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 1012– 0004 (expires 12/31/2012). Burden covered under § 1210.52. Subpart J—Gas Production From Indian Leases 1202.551(b) ................................. How do I determine the volume of production for which I must pay royalty if my lease is not in an approved Federal unit or communitization agreement (AFA)? (b) You and all other persons paying royalties on the lease must report and pay royalties based on your takes. 1202.551(c) ................................. (c) You and all other persons paying royalties on the lease may ask ONRR for permission * * * to report entitlements. 1202.558(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: Burden covered under OMB Control Number 1012– 0004. Burden covered under § 1210.52. 1 1 1 Burden covered under OMB Control Number 1012– 0004. Burden covered under § 1210.52. PART 1206—PRODUCT VALUATION Subpart B—Indian Oil Transportation allowances—general ....................... (b)(2) Upon request of a lessee, ONRR 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 ONRR to make a determination. 1206.57(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. 1206.57(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 § 1206.57(c)(1)(i) and (iii). 1206.57(a)(1)(iii) .......................... mstockstill on DSK4VPTVN1PROD with NOTICES 1206.56(b)(2) ............................... (a) Arm’s-length transportation contracts ................ (1)(iii) * * * When ONRR determines that the value of the transportation may be unreasonable, ONRR will notify the lessee and give the lessee an opportunity to provide written information justifying the lessee’s transportation costs. AUDIT PROCESS. See note. 1206.57(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 ONRR approval. Burden covered under § 1206.57(a)(3). VerDate Mar<15>2010 15:59 Dec 07, 2011 Jkt 226001 PO 00000 Frm 00060 Fmt 4703 Sfmt 4703 4 E:\FR\FM\08DEN1.SGM 08DEN1 1 4 76749 Federal Register / Vol. 76, No. 236 / Thursday, December 8, 2011 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Average number of annual responses Annual burden hours 20 1 20 40 1 40 Reporting and recordkeeping requirement 1206.57(a)(2)(ii) ........................... (a) Arm’s-length transportation contracts ................ (2)(ii) Notwithstanding the requirements of paragraph (i), the lessee may propose to ONRR a cost allocation method on the basis of the values of the products transported. 1206.57(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 ONRR. * * * The lessee shall submit all available data to support its proposal. 1206.57(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 ONRR, unless ONRR approves a longer period upon a showing of good cause by the lessee. Burden covered under § 1206.57(c)(2)(i) and (iii). 1206.57(b)(1) ............................... (b) Non-arm’s-length or no contract ........................ (1) * * * When necessary or appropriate, ONRR may direct a lessee to modify its actual transportation allowance deduction. Burden covered under OMB Control Number 1012– 0004. Burden covered under § 1210.52. 1206.57(b)(2)(iv) .......................... (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 ONRR. 20 1 20 1206.57(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 ONRR approval. 20 1 20 1206.57(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 ONRR approval. 40 1 40 1206.57(b)(3)(ii) ........................... (b) Non-arm’s-length or no contract ........................ (3)(ii) Notwithstanding the requirements of paragraph (i), the lessee may propose to ONRR a cost allocation method on the basis of the values of the products transported. 20 1 20 1206.57(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 ONRR. * * * The lessee shall submit all available data to support its proposal. 20 1 20 1206.57(b)(5) ............................... mstockstill on DSK4VPTVN1PROD with NOTICES 30 CFR (b) Non-arm’s-length or no contract ........................ (5) A lessee may apply to ONRR 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 VerDate Mar<15>2010 15:59 Dec 07, 2011 Jkt 226001 PO 00000 Frm 00061 Fmt 4703 Sfmt 4703 Hour burden E:\FR\FM\08DEN1.SGM 08DEN1 76750 Federal Register / Vol. 76, No. 236 / Thursday, December 8, 2011 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Average number of annual responses Annual burden hours 4 1 4 4 1 4 Reporting and recordkeeping requirement 1206.57(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. 1206.57(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 ONRR approves a longer period (during which period the lessee shall continue to use the allowance from the previous reporting period). 1206.57(c)(1)(iv) .......................... (c) Reporting requirements ...................................... (1) Arm’s-length contracts. (iv) ONRR 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 ONRR. 1206.57(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 1206.57(c)(2)(iii) .......................... mstockstill on DSK4VPTVN1PROD with NOTICES 30 CFR (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. * * * ONRR must receive the Form MMS–4110 within 3 months after the end of the previous reporting period, unless ONRR approves a longer period (during which period the lessee shall continue to use the allowance from the previous reporting period). 6 1 6 1206.57(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. VerDate Mar<15>2010 15:59 Dec 07, 2011 Jkt 226001 PO 00000 Frm 00062 Fmt 4703 Sfmt 4703 Hour burden AUDIT PROCESS. See note. Burden covered under § 1206.57(c)(2)(i). E:\FR\FM\08DEN1.SGM 08DEN1 76751 Federal Register / Vol. 76, No. 236 / Thursday, December 8, 2011 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Average number of annual responses Hour burden Annual burden hours 30 CFR Reporting and recordkeeping requirement 1206.57(c)(2)(v) ........................... (c) Reporting requirements ...................................... (2) Non-arm’s-length or no contract. (v) * * * only those allowances that have been approved by ONRR in writing. Burden covered under § 1206.57(c)(2)(i). 1206.57(c)(2)(vi) .......................... (c) Reporting requirements ...................................... (2) Non-arm’s-length or no contract. (vi) Upon request by ONRR, 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 ONRR. AUDIT PROCESS. See note. 1206.57(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 1012– 0004. Burden covered under § 1210.52. 1206.59 ....................................... May I ask ONRR for valuation guidance? ............... You may ask ONRR for guidance in determining value. You may propose a value method to ONRR. Submit all available data related to your proposal and any additional information ONRR deems necessary. 1206.61(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 ONRR, Indian representatives, or other authorized persons. (b) You must retain all data relevant to the determination of royalty value. 20 1 20 AUDIT PROCESS. See note. PART 1206—PRODUCT VALUATION Subpart E—Indian Gas 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. 4 58 232 1206.172(e)(6)(i) and (iii) ............ mstockstill on DSK4VPTVN1PROD with NOTICES 1206.172(b)(1)(ii) ......................... (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 ONRR on Form MMS–4411, Safety Net Report, no later than June 30 following each calendar year; (iii) ONRR 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. 3 11 33 1206.172(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. VerDate Mar<15>2010 15:59 Dec 07, 2011 Jkt 226001 PO 00000 Frm 00063 Fmt 4703 Sfmt 4703 Burden covered under OMB Control Number 1012– 0004. Burden covered under § 1210.52. E:\FR\FM\08DEN1.SGM 08DEN1 76752 Federal Register / Vol. 76, No. 236 / Thursday, December 8, 2011 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Average number of annual responses Annual burden hours 40 1 40 2 12 24 Reporting and recordkeeping requirement 1206.172(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 ONRR 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, ONRR 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 ONRR S to terminate exclusion of its leases from valuation under this section. (3) The Indian Tribe’s request to ONRR under either paragraph (f)(1) or (2) of this section must be in the form of a Tribal resolution. 1206.173(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 § 1206.176(a) (called actual dual accounting), or paragraph (b) of this section (called the alternative methodology for dual accounting). 1206.173(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 ONRR S-designated area. Burden covered under § 1206.173(a)(1). 1206.174(a)(4)(ii) ......................... How do I value gas production when an indexbased 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 ONRR by the due date specified in the written notice from ONRR of the major portion value. Burden covered under OMB Control Number 1012– 0004. Burden covered under § 1210.52. 1206.174 (b)(1)(i) and (iii); (b)(2); (d)(2). mstockstill on DSK4VPTVN1PROD with NOTICES 30 CFR (b) Arm’s-length contracts ........................................ (1)(i) You have the burden of demonstrating that your contract is arm’s-length. (iii) * * * In these circumstances, ONRR will notify you and give you an opportunity to provide written information justifying your value. (2) ONRR 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 ONRR or Indian representatives, to the Office of the Inspector General of the Department, or other authorized persons. AUDIT PROCESS. See note. 1206.174(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. Burden covered under OMB Control Number 1012– 0004. VerDate Mar<15>2010 15:59 Dec 07, 2011 Jkt 226001 PO 00000 Frm 00064 Fmt 4703 Sfmt 4703 Hour burden E:\FR\FM\08DEN1.SGM 08DEN1 76753 Federal Register / Vol. 76, No. 236 / Thursday, December 8, 2011 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Average number of annual responses Annual burden hours 40 1 40 20 1 20 30 CFR Reporting and recordkeeping requirement Hour burden 1206.174(f) .................................. (f) Value guidance. You may ask ONRR for guidance in determining value. You may propose a valuation method to ONRR. Submit all available data related to your proposal and any additional information ONRR deems necessary. 1206.175(d)(4) ............................. How do I determine quantities and qualities of production for computing royalties? (d)(4) You may request ONRR approval of other methods for determining the quantity of residue gas and gas plant products allocable to each lease. 1206.176(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 § 1206.173 instead of the provisions in paragraph (a) of this section. Burden covered under § 1206.173(a)(1). 1206.176(c) ................................. (c) * * * If you do not perform dual accounting, you must certify to ONRR that gas flows into such a pipeline before it is processed. Burden covered under § 1206.172(b)(1)(ii). Transportation Allowances What general requirements regarding transportation allowances apply to me? (c)(2) If you ask ONRR, ONRR 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 ONRR to make a determination. 1206.178(a)(1)(i) ......................... How do I determine a transportation allowance? .... (a) Determining a transportation allowance under an arm’s-length contract. (1)(i) * * * You are required to submit to ONRR a copy of your arm’s-length transportation contract(s) and all subsequent amendments to the contract(s) within 2 months of the date ONRR receives your report which claims the allowance on the Form MMS–2014. 1206.178(a)(1)(iii) ........................ (a) Determining a transportation allowance under an arm’s-length contract. (1)(iii) If ONRR 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, ONRR will notify you and give you an opportunity to provide written information justifying your transportation costs. 1206.178(a)(2)(i) and (ii) ............. mstockstill on DSK4VPTVN1PROD with NOTICES 1206.177(c)(2) and (c)(3) ............ (a) Determining a transportation allowance under an arm’s-length contract. (2)(i) * * * you cannot take an allowance for the costs of transporting lease production that is not royalty bearing without ONRR approval, or without lessor approval on Tribal leases. (ii) As an alternative to paragraph (a)(2)(i) of this section, you may propose to ONRR a cost allocation method based on the values of the products transported. VerDate Mar<15>2010 15:59 Dec 07, 2011 Jkt 226001 PO 00000 Frm 00065 Fmt 4703 Sfmt 4703 Burden covered under § 1206.56(b)(2). 1 18 18 AUDIT PROCESS. See note. E:\FR\FM\08DEN1.SGM 20 08DEN1 1 20 76754 Federal Register / Vol. 76, No. 236 / Thursday, December 8, 2011 / 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’s-length contract or no contract. (1)(ii) * * * You must submit the actual cost information to support the allowance to ONRR on Form MMS–4295, Gas Transportation Allowance Report, within 3 months after the end of the 12month period to which the allowance applies. 15 5 75 1206.178(b)(2)(iv) ........................ (b) Determining a transportation allowance under a non-arm’s-length contract or no contract. (2)(iv) You may use either depreciation with a return on undepreciated capital investment or a return on depreciable capital investment. * * * you may not later elect to change to the other alternative without ONRR approval. 20 1 20 1206.178(b)(2)(iv)(A) ................... (b) Determining a transportation allowance under a non-arm’s-length contract or no contract. (2)(iv)(A) * * * Once you make an election, you may not change methods without ONRR approval. 20 1 20 1206.178(b)(3)(i) ......................... (b) Determining a transportation allowance under a non-arm’s-length 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 ONRR approval. 40 1 40 1206.178(b)(3)(ii) ......................... (b) Determining a transportation allowance under a non-arm’s-length contract or no contract. (3)(ii) As an alternative to the requirements of paragraph (b)(3)(i) of this section, you may propose to ONRR a cost allocation method based on the values of the products transported. 20 1 20 1206.178(b)(5) ............................. (b) Determining a transportation allowance under a non-arm’s-length 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 ONRR. * * * You are required to submit all relevant data to support your proposal. 40 1 40 1206.178(d)(1) ............................. (d) Reporting your transportation allowance ........... (1) If ONRR requests, you must submit all data used to determine your transportation allowance. Reporting and recordkeeping requirement 1206.178(a)(3)(i) and (ii) ............. (a) Determining a transportation allowance under an arm’s-length contract. (3)(i) If your arm’s-length transportation contract includes both gaseous and liquid products and the transportation costs attributable to each cannot be determined from the contract, you must propose an allocation procedure to ONRR. (ii) You are required to submit all relevant data to support your allocation proposal. 1206.178(b)(1)(ii) ......................... mstockstill on DSK4VPTVN1PROD with NOTICES 30 CFR VerDate Mar<15>2010 15:59 Dec 07, 2011 Jkt 226001 PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 Hour burden AUDIT PROCESS. See note. E:\FR\FM\08DEN1.SGM 08DEN1 76755 Federal Register / Vol. 76, No. 236 / Thursday, December 8, 2011 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued 30 CFR Reporting and recordkeeping requirement 1206.178(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 1218.54 from the first day of the first month you deducted the improper transportation allowance until the date you pay the royalties due. (f) Determining allowable costs for transportation allowances. (1) Firm demand charges paid to pipelines. * * * You must modify the Form MMS–2014 by the amount received or credited for the affected reporting period. Average number of annual responses Hour burden Annual burden hours Burden covered under OMB Control Number 1012– 0004. Burden covered under § 1210.52. Processing Allowances How do I determine an actual processing allowance? (a) Determining a processing allowance if you have an arm’s-length processing contract. (1)(i) * * * You have the burden of demonstrating that your contract is arm’s-length. You are required to submit to ONRR a copy of your arm’slength contract(s) and all subsequent amendments to the contract(s) within 2 months of the date ONRR receives your first report that deducts the allowance on the Form MMS–2014. 1206.180(a)(1)(iii) ........................ (a) Determining a processing allowance if you have an arm’s-length processing contract. (1)(iii) If ONRR 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, ONRR will notify you and give you an opportunity to provide written information justifying your processing costs. 1206.180(a)(3) ............................. (a) Determining a processing allowance if you have an arm’s-length processing contract. (3) If your arm’s-length processing contract includes more than one gas plant product and the processing costs attributable to each product cannot be determined from the contract, you must propose an allocation procedure to ONRR. * * * You are required to submit all relevant data to support your proposal. 40 1 40 1206.180(b)(1)(ii) ......................... mstockstill on DSK4VPTVN1PROD with NOTICES 1206.180(a)(1)(i) ......................... (b) Determining a processing allowance if you have a non-arm’s-length contract or no contract. (1)(ii) * * * You must submit the actual cost information to support the allowance to ONRR 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 12 240 VerDate Mar<15>2010 15:59 Dec 07, 2011 Jkt 226001 PO 00000 Frm 00067 Fmt 4703 Sfmt 4703 1 2 2 AUDIT PROCESS. See note. E:\FR\FM\08DEN1.SGM 08DEN1 76756 Federal Register / Vol. 76, No. 236 / Thursday, December 8, 2011 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued Average number of annual responses Annual burden hours 20 1 20 (b) Determining a processing allowance if you have a non-arm’s-length contract or no contract. (2)(iv)(A) * * * Once you make an election, you may not change methods without ONRR approval. 20 1 20 1206.180(b)(3) ............................. (b) Determining a processing allowance if you have a non-arm’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 ONRR agree to an alternative. 20 1 20 1206.180(c)(1) ............................. (c) Reporting your processing allowance ................ (1) If ONRR requests, you must submit all data used to determine your processing allowance. AUDIT PROCESS. See note. 1206.180(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 1218.54 from the first day of the first month you deducted a processing allowance until the date you pay the royalties due. Burden covered under OMB Control Number 1012– 0004. Burden covered under § 1210.52. 1206.181(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 ONRR (for Tribal leases) or ONRR (for allotted leases) with your supporting documentation submitted to ONRR. If ONRR does not take action on your proposal within 120 days, the proposal will be deemed to be denied and subject to appeal to the ONRR Director under 30 CFR part 1290. 30 CFR Reporting and recordkeeping requirement Hour burden 1206.180(b)(2)(iv) ........................ (b) Determining a processing allowance if you have a non-arm’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 ONRR approval. 1206.180(b)(2)(iv)(A) ................... 40 1 PART 1207—SALES AGREEMENTS OR CONTRACTS GOVERNING THE DISPOSAL OF LEASE PRODUCTS Subpart A—General Provisions mstockstill on DSK4VPTVN1PROD with NOTICES 1207.4(b) ..................................... VerDate Mar<15>2010 15:59 Dec 07, 2011 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. Jkt 226001 PO 00000 Frm 00068 Fmt 4703 Sfmt 4703 AUDIT PROCESS. See note. E:\FR\FM\08DEN1.SGM 08DEN1 40 76757 Federal Register / Vol. 76, No. 236 / Thursday, December 8, 2011 / Notices RESPONDENTS’ ESTIMATED ANNUAL BURDEN HOURS—Continued 30 CFR Reporting and recordkeeping requirement Hour burden 1207.5 ......................................... 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 ONRR, State or Indian representatives, other ONRR or BLM officials, auditors of the General Accounting Office, or other persons authorized to receive such documents, or shall be submitted to ONRR within a reasonable period of time, as determined by ONRR. 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 1212. TOTAL BURDEN ................. .................................................................................. Average number of annual responses Annual burden hours AUDIT PROCESS. See note. .................................. 148 1,309 mstockstill on DSK4VPTVN1PROD 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 ONRR 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 60-day notice in the Federal Register * * * and otherwise consult with members of the public and affected agencies concerning each proposed collection of information * * *.’’ Agencies must specifically solicit comments to: (a) Evaluate whether the proposed collection of information is necessary for the agency to perform its duties, including whether the information is useful; (b) evaluate the accuracy of the agency’s estimate of the burden of the proposed collection of information; (c) enhance the quality, usefulness, and clarity of the information to be collected; and (d) minimize the burden on the respondents, including the use of automated collection techniques or other forms of information technology. 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 VerDate Mar<15>2010 15:59 Dec 07, 2011 Jkt 226001 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. 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. We also will post the ICR at http://www.onrr.gov/Laws_R_D/ FRNotices/FRInfColl.htm. Public Comment Policy: We will post all comments, including names and addresses of respondents, at http:// regulations.gov. Before including your address, phone number, email address, or other personal identifying information in your comment, be PO 00000 Frm 00069 Fmt 4703 Sfmt 4703 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. Office of the Secretary, Information Collection Clearance Officer: Laura Dorey (202) 208–2654. Dated: November 29, 2011. Gregory J. Gould, Director, Office of Natural Resources Revenue. [FR Doc. 2011–31496 Filed 12–7–11; 8:45 am] BILLING CODE 4310–T2–P DEPARTMENT OF THE INTERIOR Office of Natural Resources Revenue [Docket No. ONRR–2011–0002] States’ Decisions on Participating in Accounting and Auditing Relief for Federal Oil and Gas Marginal Properties Office of Natural Resources Revenue, Interior. ACTION: Notice. AGENCY: Final regulations published September 13, 2004 (69 FR 55076), provide two types of accounting and auditing relief for Federal onshore or Outer Continental Shelf lease production from marginal properties. As required by the regulations, the Office of Natural Resources Revenue (ONRR) SUMMARY: E:\FR\FM\08DEN1.SGM 08DEN1

Agencies

[Federal Register Volume 76, Number 236 (Thursday, December 8, 2011)]
[Notices]
[Pages 76746-76757]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-31496]


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

DEPARTMENT OF THE INTERIOR

Office of Natural Resources Revenue

[Docket No. ONRR-2011-0021]


Agency Information Collection Activities: Proposed Collection, 
Comment Request

AGENCY: Office of Natural Resources Revenue (ONRR), Interior.

ACTION: Notice of an extension of a currently approved information 
collection.

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

SUMMARY: To comply with the Paperwork Reduction Act of 1995 (PRA), we 
are inviting comments on a collection of information requests that we 
will submit to the Office of Management and Budget (OMB) for review and 
approval. The OMB formerly approved this information collection request 
(ICR) under OMB Control Number 1010-0103. After the Secretary of the 
Department of the Interior established ONRR (the former Minerals 
Revenue Management, a program under the Minerals Management Service) on 
October 1, 2010, OMB approved a new series number for ONRR and 
renumbered our ICRs. This ICR covers the paperwork requirements in the 
regulations under title 30, Code of Federal Regulations (CFR), parts 
1202, 1206, and 1207 (previously 30 CFR parts 202, 206, and 207). The 
revised title of this ICR is ``30 CFR Parts 1202, 1206, and 1207, 
Indian Oil and Gas Valuation.'' There are five forms associated with 
this information collection.

DATES: Submit written comments on or before January 9, 2012.

ADDRESSES: You may submit comments on this ICR to ONRR by any of the 
following methods. Please use ``ICR 1012-0002'' as an identifier in 
your comment.
     Electronically go to http://www.regulations.gov. In the 
entry titled ``Enter Keyword or ID,'' enter ``ONRR-2011-0021'' and then 
click ``Search.'' Follow the instructions to submit public comments. 
The ONRR will post all comments.
     Mail comments to Armand Southall, Regulatory Specialist, 
Office of Natural Resources, P.O. Box 25165, MS 64000A, Denver, 
Colorado 80225. Please reference ICR 1012-0002 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 St., Denver, Colorado 80225. Please reference 
ICR 1012-0002 in your comments.

FOR FURTHER INFORMATION CONTACT: Armand Southall, telephone (303) 231-
3221, or email armand.southall@onrr.gov. You may also contact Mr. 
Southall 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. You may also review the information 
collection online at http://www.reginfo.gov/public/PRAMain.

SUPPLEMENTARY INFORMATION: 
    Title: 30 CFR Parts 1202, 1206, and 1207, Indian Oil and Gas 
Valuation.
    OMB Control Number: 1012-0002.
    Bureau Form Number: Forms MMS-4109, MMS-4110, MMS-4295, MMS-4410, 
and MMS-4411.

    Note: The ONRR will publish a rule updating our form numbers to 
Forms ONRR-4109, ONRR-4110, ONRR-4295, ONRR-4410, and ONRR-4411.

    Abstract: The Secretary of the U.S. Department of the Interior is 
responsible for mineral resource development on Federal and Indian 
lands and the Outer Continental Shelf (OCS). The Secretary is required 
by various laws to manage mineral resource production on Federal and 
Indian lands and the OCS, collect the royalties and other mineral 
revenues due, and distribute the funds in accordance with those laws. 
Applicable laws pertaining to mineral leases on Federal and Indian 
lands and the OCS are posted on our Web site at http://www.onrr.gov/Laws_R_D/PublicLawsAMR.htm.

[[Page 76747]]

    The Secretary also has a trust responsibility to manage Indian 
lands and seek advice and information from Indian beneficiaries. The 
ONRR performs the minerals revenue management functions and assists the 
Secretary in carrying out the Department's trust responsibility for 
Indian lands. Indian Tribes and individual Indian mineral owners 
receive all royalties generated from their lands. Determining product 
valuation is essential to ensure that Indian Tribes and individual 
Indian mineral owners receive payment on the full value of the minerals 
removed from their lands. Failure to collect the data described in this 
information collection could result in the undervaluation of leased 
minerals on Indian lands.
    Effective October 1, 2010, ONRR reorganized and transferred their 
regulations from chapter II to chapter XII in title 30 of the Code of 
Federal Regulations (CFR), resulting in a change in our citations. 
Information collections covered in this ICR are found at 30 CFR part 
1202, subparts C and J, which pertain to royalties; part 1206, subparts 
B and E, which govern the valuation of oil and gas produced from leases 
on Indian lands; and part 1207, which pertains to recordkeeping. All 
data reported is subject to subsequent audit and adjustment.

Indian Oil

    Regulations at 30 CFR part 1206, subpart B, govern the valuation 
for royalty purposes of all oil produced from Indian oil and gas leases 
(Tribal and allotted), except leases on the Osage Indian Reservation, 
and are consistent with mineral leasing laws, other applicable laws, 
and lease terms. Generally, the regulations provide that lessees 
determine the value of oil based upon the higher of (1) The gross 
proceeds under an arm's-length contract; or (2) major portion analysis. 
The value determined by the lessee may be eligible for a transportation 
allowance.
    From information collected on Form MMS-4110, Oil Transportation 
Allowance Report, ONRR and Tribal audit personnel evaluate (1) Whether 
lessee-reported transportation allowances are within regulatory 
allowance limitations and calculated in accordance with applicable 
regulations; and (2) whether the lessees reported and paid the proper 
amount of royalties.

Indian Gas

    Regulations at 30 CFR part 1206, subpart E, govern the valuation 
for royalty purposes of natural gas produced from Indian oil and gas 
leases (Tribal and allotted). 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 1206.176 or alternative dual accounting as defined in 30 CFR 
1206.173. 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 ONRR 
compliance efforts.
    From information collected on Form MMS-4295, Gas Transportation 
Allowance Report, ONRR and Tribal audit personnel evaluate (1) Whether 
lessee-reported transportation allowances are within regulatory 
allowance limitations and calculated in accordance with applicable 
regulations; and (2) whether the lessees reported and paid the proper 
amount of royalties.
    From information collected on Form MMS-4109, Gas Processing 
Allowance Summary Report, ONRR and Tribal audit personnel evaluate (1) 
whether lessee-reported processing allowances are within regulatory 
allowance limitations and calculated in accordance with applicable 
regulations; and (2) whether the lessees reported and paid the proper 
amount of royalties.

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, presently 1012-0005, 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 (1) submit a letter 
to ONRR explaining why a higher allowance limit is necessary; and (2) 
provide supporting documentation, including a completed Form MMS-4393. 
This form provides ONRR with the data necessary to make a decision 
whether to approve or deny the request and track deductions on royalty 
reports.

OMB Approval

    The ONRR will request OMB's approval to continue to collect this 
information. Not collecting this information would limit the 
Secretary's ability to discharge fiduciary duties and may also result 
in the inability to confirm the accurate royalty value to Indian Tribes 
and individual Indian mineral owners. ONRR protects proprietary 
information it receives, and does not collect items of a sensitive 
nature. The requirement to respond is mandatory for Form MMS-4410, 
Accounting for Comparison [Dual Accounting], and Form MMS-4411, Safety 
Net Report, under certain circumstances. And, the lessees are required 
to submit Forms MMS-4109, MMS-4110, and MMS-4295 in order to obtain a 
benefit.
    Frequency of Response: Annually and on occasion.
    Estimated Number and Description of Respondents: 148 Indian 
lessees.
    Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 1,309 
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:

[[Page 76748]]



                                   Respondents' Estimated Annual Burden Hours
----------------------------------------------------------------------------------------------------------------
                                                                                      Average
                                         Reporting and                               number of     Annual burden
              30 CFR                     recordkeeping           Hour burden          annual           hours
                                          requirement                                responses
----------------------------------------------------------------------------------------------------------------
                                              PART 1202--ROYALTIES
                                        Subpart C--Federal and Indian Oil
----------------------------------------------------------------------------------------------------------------
1202.101.........................  Standards for reporting    Burden covered under OMB Control Number 1012-0004
                                    and paying royalties.      (expires 12/31/2012). Burden covered under Sec.
                                   Oil volumes are to be                           1210.52.
                                    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
----------------------------------------------------------------------------------------------------------------
1202.551(b)......................  How do I determine the     Burden covered under OMB Control Number 1012-0004.
                                    volume of production             Burden covered under Sec.   1210.52.
                                    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.
----------------------------------------------------------------------------------------------------------------
1202.551(c)......................  (c) You and all other                       1               1               1
                                    persons paying
                                    royalties on the lease
                                    may ask ONRR for
                                    permission * * * to
                                    report entitlements.
----------------------------------------------------------------------------------------------------------------
1202.558(a) and (b)..............  What standards do I use    Burden covered under OMB Control Number 1012-0004.
                                    to report and pay                Burden covered under Sec.   1210.52.
                                    royalties on gas?
                                   (a) You must report gas
                                    volumes as follows:.
                                   (b) You must report
                                    residue gas and gas
                                    plant product volumes
                                    as follows:.
----------------------------------------------------------------------------------------------------------------
                                          PART 1206--PRODUCT VALUATION
                                              Subpart B--Indian Oil
----------------------------------------------------------------------------------------------------------------
1206.56(b)(2)....................  Transportation                              4               1               4
                                    allowances--general.
                                   (b)(2) Upon request of a
                                    lessee, ONRR 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 ONRR to make a
                                    determination.
----------------------------------------------------------------------------------------------------------------
1206.57(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.
----------------------------------------------------------------------------------------------------------------
1206.57(a)(1)(i).................  (a) Arm's-length            Burden covered under Sec.   1206.57(c)(1)(i) and
                                    transportation                                  (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.
----------------------------------------------------------------------------------------------------------------
1206.57(a)(1)(iii)...............  (a) Arm's-length                        AUDIT PROCESS. See note.
                                    transportation
                                    contracts.
                                   (1)(iii) * * * When ONRR
                                    determines that the
                                    value of the
                                    transportation may be
                                    unreasonable, ONRR will
                                    notify the lessee and
                                    give the lessee an
                                    opportunity to provide
                                    written information
                                    justifying the lessee's
                                    transportation costs.
----------------------------------------------------------------------------------------------------------------
1206.57(a)(2)(i).................  (a) Arm's-length               Burden covered under Sec.   1206.57(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 ONRR approval.
----------------------------------------------------------------------------------------------------------------

[[Page 76749]]

 
1206.57(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
                                    ONRR a cost allocation
                                    method on the basis of
                                    the values of the
                                    products transported.
----------------------------------------------------------------------------------------------------------------
1206.57(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
                                    ONRR. * * * The lessee
                                    shall submit all
                                    available data to
                                    support its proposal.
----------------------------------------------------------------------------------------------------------------
1206.57(b)(1)....................  (b) Non-arm's-length or     Burden covered under Sec.   1206.57(c)(2)(i) and
                                    no contract.                                    (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
                                    ONRR, unless ONRR
                                    approves a longer
                                    period upon a showing
                                    of good cause by the
                                    lessee.
----------------------------------------------------------------------------------------------------------------
1206.57(b)(1)....................  (b) Non-arm's-length or    Burden covered under OMB Control Number 1012-0004.
                                    no contract.                     Burden covered under Sec.   1210.52.
                                   (1) * * * When necessary
                                    or appropriate, ONRR
                                    may direct a lessee to
                                    modify its actual
                                    transportation
                                    allowance deduction.
----------------------------------------------------------------------------------------------------------------
1206.57(b)(2)(iv)................  (b) Non-arm's-length or                    20               1              20
                                    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 ONRR.
----------------------------------------------------------------------------------------------------------------
1206.57(b)(2)(iv)(A).............  (b) Non-arm's-length or                    20               1              20
                                    no contract.
                                   (2)(iv)(A) * * * After
                                    an election is made,
                                    the lessee may not
                                    change methods without
                                    ONRR approval.
----------------------------------------------------------------------------------------------------------------
1206.57(b)(3)(i).................  (b) Non-arm's-length or                    40               1              40
                                    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
                                    ONRR approval.
----------------------------------------------------------------------------------------------------------------
1206.57(b)(3)(ii)................  (b) Non-arm's-length or                    20               1              20
                                    no contract.
                                   (3)(ii) Notwithstanding
                                    the requirements of
                                    paragraph (i), the
                                    lessee may propose to
                                    ONRR a cost allocation
                                    method on the basis of
                                    the values of the
                                    products transported.
----------------------------------------------------------------------------------------------------------------
1206.57(b)(4)....................  (b) Non-arm's-length or                    20               1              20
                                    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
                                    ONRR. * * * The lessee
                                    shall submit all
                                    available data to
                                    support its proposal.
----------------------------------------------------------------------------------------------------------------
1206.57(b)(5)....................  (b) Non-arm's-length or                    20               1              20
                                    no contract.
                                   (5) A lessee may apply
                                    to ONRR for an
                                    exception from the
                                    requirement that it
                                    compute actual costs in
                                    accordance with
                                    paragraphs (b)(1)
                                    through (b)(4) of this
                                    section.
----------------------------------------------------------------------------------------------------------------

[[Page 76750]]

 
1206.57(c)(1)(i).................  (c) Reporting                               4               1               4
                                    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.
----------------------------------------------------------------------------------------------------------------
1206.57(c)(1)(iii)...............  (c) Reporting                               4               1               4
                                    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 ONRR approves a
                                    longer period (during
                                    which period the lessee
                                    shall continue to use
                                    the allowance from the
                                    previous reporting
                                    period).
----------------------------------------------------------------------------------------------------------------
1206.57(c)(1)(iv)................  (c) Reporting                           AUDIT PROCESS. See note.
                                    requirements.
                                   (1) Arm's-length
                                    contracts. (iv) ONRR
                                    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
                                    ONRR.
----------------------------------------------------------------------------------------------------------------
1206.57(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.
----------------------------------------------------------------------------------------------------------------
1206.57(c)(2)(iii)...............  (c) Reporting                               6               1               6
                                    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. * * *
                                    ONRR must receive the
                                    Form MMS-4110 within 3
                                    months after the end of
                                    the previous reporting
                                    period, unless ONRR
                                    approves a longer
                                    period (during which
                                    period the lessee shall
                                    continue to use the
                                    allowance from the
                                    previous reporting
                                    period).
----------------------------------------------------------------------------------------------------------------
1206.57(c)(2)(iv)................  (c) Reporting                Burden covered under Sec.   1206.57(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.
----------------------------------------------------------------------------------------------------------------

[[Page 76751]]

 
1206.57(c)(2)(v).................  (c) Reporting                Burden covered under Sec.   1206.57(c)(2)(i).
                                    requirements.
                                   (2) Non-arm's-length or
                                    no contract..
                                   (v) * * * only those
                                    allowances that have
                                    been approved by ONRR
                                    in writing.
----------------------------------------------------------------------------------------------------------------
1206.57(c)(2)(vi)................  (c) Reporting                           AUDIT PROCESS. See note.
                                    requirements.
                                   (2) Non-arm's-length or
                                    no contract..
                                   (vi) Upon request by
                                    ONRR, 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
                                    ONRR.
----------------------------------------------------------------------------------------------------------------
1206.57(c)(4) and (e)(2).........  (c) Reporting              Burden covered under OMB Control Number 1012-0004.
                                    requirements.                    Burden covered under Sec.   1210.52.
                                   (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.
----------------------------------------------------------------------------------------------------------------
1206.59..........................  May I ask ONRR for                         20               1              20
                                    valuation guidance?.
                                   You may ask ONRR for
                                    guidance in determining
                                    value. You may propose
                                    a value method to ONRR.
                                    Submit all available
                                    data related to your
                                    proposal and any
                                    additional information
                                    ONRR deems necessary.
----------------------------------------------------------------------------------------------------------------
1206.61(a) and (b)...............  What records must I keep                AUDIT PROCESS. See note.
                                    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 ONRR,
                                    Indian representatives,
                                    or other authorized
                                    persons.
                                   (b) You must retain all
                                    data relevant to the
                                    determination of
                                    royalty value.
----------------------------------------------------------------------------------------------------------------
                                          PART 1206--PRODUCT VALUATION
                                              Subpart E--Indian Gas
----------------------------------------------------------------------------------------------------------------
1206.172(b)(1)(ii)...............  How do I value gas                          4              58             232
                                    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.
----------------------------------------------------------------------------------------------------------------
1206.172(e)(6)(i) and (iii)......  (e) Determining the                         3              11              33
                                    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
                                    ONRR on Form MMS-4411,
                                    Safety Net Report, no
                                    later than June 30
                                    following each calendar
                                    year;.
                                   (iii) ONRR 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.
----------------------------------------------------------------------------------------------------------------
1206.172(e)(6)(ii)...............  (e) Determining the        Burden covered under OMB Control Number 1012-0004.
                                    minimum value for                Burden covered under Sec.   1210.52.
                                    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.
----------------------------------------------------------------------------------------------------------------

[[Page 76752]]

 
1206.172(f)(1)(ii), (f)(2), and    (f ) Excluding some or                     40               1              40
 (f)(3).                            all Tribal leases from
                                    valuation under this
                                    section.
                                   (1) An Indian Tribe may
                                    ask ONRR 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,
                                    ONRR 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 ONRR S to terminate
                                    exclusion of its leases
                                    from valuation under
                                    this section.
                                   (3) The Indian Tribe's
                                    request to ONRR under
                                    either paragraph (f)(1)
                                    or (2) of this section
                                    must be in the form of
                                    a Tribal resolution.
----------------------------------------------------------------------------------------------------------------
1206.173(a)(1)...................  How do I calculate the                      2              12              24
                                    alternative methodology
                                    for dual accounting?
                                   (a) Electing a dual
                                    accounting method..
                                   (1) * * * You may elect
                                    to perform the dual
                                    accounting calculation
                                    according to either
                                    Sec.   1206.176(a)
                                    (called actual dual
                                    accounting), or
                                    paragraph (b) of this
                                    section (called the
                                    alternative methodology
                                    for dual accounting).
----------------------------------------------------------------------------------------------------------------
1206.173(a)(2)...................  (a) Electing a dual           Burden covered under Sec.   1206.173(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
                                    ONRR S-designated area.
----------------------------------------------------------------------------------------------------------------
1206.174(a)(4)(ii)...............  How do I value gas         Burden covered under OMB Control Number 1012-0004.
                                    production when an               Burden covered under Sec.   1210.52.
                                    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 ONRR by the due
                                    date specified in the
                                    written notice from
                                    ONRR of the major
                                    portion value.
----------------------------------------------------------------------------------------------------------------
1206.174 (b)(1)(i) and (iii);      (b) Arm's-length                        AUDIT PROCESS. See note.
 (b)(2); (d)(2).                    contracts.
                                   (1)(i) You have the
                                    burden of demonstrating
                                    that your contract is
                                    arm's-length.
                                   (iii) * * * In these
                                    circumstances, ONRR
                                    will notify you and
                                    give you an opportunity
                                    to provide written
                                    information justifying
                                    your value.
                                   (2) ONRR 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 ONRR or
                                    Indian representatives,
                                    to the Office of the
                                    Inspector General of
                                    the Department, or
                                    other authorized
                                    persons.
----------------------------------------------------------------------------------------------------------------
1206.174(d)......................  (d) Supporting data. If    Burden covered under OMB Control Number 1012-0004.
                                    you determine the value
                                    of production under
                                    paragraph (c) of this
                                    section, you must
                                    retain all data
                                    relevant to
                                    determination of
                                    royalty value.
----------------------------------------------------------------------------------------------------------------

[[Page 76753]]

 
1206.174(f)......................  (f) Value guidance. You                    40               1              40
                                    may ask ONRR for
                                    guidance in determining
                                    value. You may propose
                                    a valuation method to
                                    ONRR. Submit all
                                    available data related
                                    to your proposal and
                                    any additional
                                    information ONRR deems
                                    necessary.
----------------------------------------------------------------------------------------------------------------
1206.175(d)(4)...................  How do I determine                         20               1              20
                                    quantities and
                                    qualities of production
                                    for computing
                                    royalties?
                                   (d)(4) You may request
                                    ONRR approval of other
                                    methods for determining
                                    the quantity of residue
                                    gas and gas plant
                                    products allocable to
                                    each lease.
----------------------------------------------------------------------------------------------------------------
1206.176(b)......................  How do I perform              Burden covered under Sec.   1206.173(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.
                                    1206.173 instead of the
                                    provisions in paragraph
                                    (a) of this section.
----------------------------------------------------------------------------------------------------------------
1206.176(c)......................  (c) * * * If you do not     Burden covered under Sec.   1206.172(b)(1)(ii).
                                    perform dual
                                    accounting, you must
                                    certify to ONRR that
                                    gas flows into such a
                                    pipeline before it is
                                    processed.
----------------------------------------------------------------------------------------------------------------
                                            Transportation Allowances
----------------------------------------------------------------------------------------------------------------
1206.177(c)(2) and (c)(3)........  What general                   Burden covered under Sec.   1206.56(b)(2).
                                    requirements regarding
                                    transportation
                                    allowances apply to me?
                                   (c)(2) If you ask ONRR,
                                    ONRR 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 ONRR to make a
                                    determination.
----------------------------------------------------------------------------------------------------------------
1206.178(a)(1)(i)................  How do I determine a                        1              18              18
                                    transportation
                                    allowance?.
                                   (a) Determining a
                                    transportation
                                    allowance under an
                                    arm's-length contract.
                                   (1)(i) * * * You are
                                    required to submit to
                                    ONRR a copy of your
                                    arm's-length
                                    transportation
                                    contract(s) and all
                                    subsequent amendments
                                    to the contract(s)
                                    within 2 months of the
                                    date ONRR receives your
                                    report which claims the
                                    allowance on the Form
                                    MMS-2014.
----------------------------------------------------------------------------------------------------------------
1206.178(a)(1)(iii)..............  (a) Determining a                       AUDIT PROCESS. See note.
                                    transportation
                                    allowance under an
                                    arm's-length contract.
                                   (1)(iii) If ONRR
                                    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, ONRR
                                    will notify you and
                                    give you an opportunity
                                    to provide written
                                    information justifying
                                    your transportation
                                    costs.
----------------------------------------------------------------------------------------------------------------
1206.178(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 costs of
                                    transporting lease
                                    production that is not
                                    royalty bearing without
                                    ONRR approval, or
                                    without lessor approval
                                    on Tribal leases.
                                   (ii) As an alternative
                                    to paragraph (a)(2)(i)
                                    of this section, you
                                    may propose to ONRR a
                                    cost allocation method
                                    based on the values of
                                    the products
                                    transported.
----------------------------------------------------------------------------------------------------------------

[[Page 76754]]

 
1206.178(a)(3)(i) and (ii).......  (a) Determining a                          40               1              40
                                    transportation
                                    allowance under an
                                    arm's-length contract.
                                   (3)(i) If your arm's-
                                    length transportation
                                    contract includes both
                                    gaseous and liquid
                                    products and the
                                    transportation costs
                                    attributable to each
                                    cannot be determined
                                    from the contract, you
                                    must propose an
                                    allocation procedure to
                                    ONRR.
                                   (ii) You are required to
                                    submit all relevant
                                    data to support your
                                    allocation proposal.
----------------------------------------------------------------------------------------------------------------
1206.178(b)(1)(ii)...............  (b) Determining a                          15               5              75
                                    transportation
                                    allowance under a non-
                                    arm's-length contract
                                    or no contract.
                                   (1)(ii) * * * You must
                                    submit the actual cost
                                    information to support
                                    the allowance to ONRR
                                    on Form MMS-4295, Gas
                                    Transportation
                                    Allowance Report,
                                    within 3 months after
                                    the end of the 12-month
                                    period to which the
                                    allowance applies.
----------------------------------------------------------------------------------------------------------------
1206.178(b)(2)(iv)...............  (b) Determining a                          20               1              20
                                    transportation
                                    allowance under a non-
                                    arm's-length 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
                                    ONRR approval.
----------------------------------------------------------------------------------------------------------------
1206.178(b)(2)(iv)(A)............  (b) Determining a                          20               1              20
                                    transportation
                                    allowance under a non-
                                    arm's-length contract
                                    or no contract.
                                   (2)(iv)(A) * * * Once
                                    you make an election,
                                    you may not change
                                    methods without ONRR
                                    approval.
----------------------------------------------------------------------------------------------------------------
1206.178(b)(3)(i)................  (b) Determining a                          40               1              40
                                    transportation
                                    allowance under a non-
                                    arm's-length 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 ONRR
                                    approval.
----------------------------------------------------------------------------------------------------------------
1206.178(b)(3)(ii)...............  (b) Determining a                          20               1              20
                                    transportation
                                    allowance under a non-
                                    arm's-length contract
                                    or no contract.
                                   (3)(ii) As an
                                    alternative to the
                                    requirements of
                                    paragraph (b)(3)(i) of