[Federal Register Volume 76, Number 241 (Thursday, December 15, 2011)]
[Notices]
[Pages 78033-78042]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-32158]
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DEPARTMENT OF THE INTERIOR
Office of Natural Resources Revenue
[Docket No. ONRR-2011-0021]
Agency Information Collection Activities: Proposed Collection,
Comment Request; Correction
AGENCY: Office of Natural Resources Revenue (ONRR), Interior.
ACTION: Notice of an extension of a currently approved information
collection.
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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. ONRR published this notice on December
8th, 2011, at 76 FR 76746, with an incorrect due date for comments.
This revised notice amends the due date.
DATES: Submit written comments on or before February 13, 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.
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
[[Page 78034]]
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:
Respondents' Estimated Annual Burden Hours
----------------------------------------------------------------------------------------------------------------
Average
Reporting and recordkeeping number of Annual burden
30 CFR requirement Hour burden annual hours
responses
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Part 1202--ROYALTIES
Subpart C--Federal and Indian Oil
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1202.101.................... Standards for reporting and paying Burden covered under OMB Control Number 1012-
royalties. 0004 (expires 12/31/2012). Burden covered
Oil volumes are to be reported in under Sec. 1210.52.
barrels of clean oil of 42
standard U.S. gallons (231 cubic
inches each) at 60 [deg]F. . .
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Subpart J--Gas Production From Indian Leases
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1202.551(b)................. How do I determine the volume of Burden covered under OMB Control Number 1012-
production for which I must pay 0004. Burden covered under Sec. 1210.52.
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. . .
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[[Page 78035]]
1202.551(c)................. (c) You and all other persons 1 1 1
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 Burden covered under OMB Control Number 1012-
and pay royalties on gas? 0004. Burden covered under Sec. 1210.52.
(a) You must report gas volumes as
follows:. . .
(b) You must report residue gas
and gas plant product volumes as
follows:. . .
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Part 1206--PRODUCT VALUATION
Subpart B--Indian Oil
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1206.56(b)(2)............... Transportation allowances-- 4 1 4
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. . .
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1206.57(a)(1)(i)............ Determination of transportation AUDIT PROCESS. See note.
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 transportation Burden covered under Sec. 1206.57(c)(1)(i)
contracts. and (iii).
(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 transportation AUDIT PROCESS. See note.
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 transportation Burden covered under Sec. 1206.57(a)(3).
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.
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1206.57(a)(2)(ii)........... (a) Arm's-length transportation 20 1 20
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. . .
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1206.57(a)(3)............... (a) Arm's-length transportation 40 1 40
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. . .
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1206.57(b)(1)............... (b) Non-arm's-length or no Burden covered under Sec. 1206.57(c)(2)(i)
contract. and (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 no Burden covered under OMB Control Number 1012-
contract. 0004. 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 no 20 1 20
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.
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[[Page 78036]]
1206.57(b)(2)(iv)(A)........ (b) Non-arm's-length or no 20 1 20
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 no 40 1 40
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 no 20 1 20
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 no 20 1 20
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 no 20 1 20
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. .
.
-----------------------------------------------
1206.57(c)(1)(i)............ (c) Reporting requirements. 4 1 4
(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. 4 1 4
(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).
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1206.57(c)(1)(iv)........... (c) Reporting requirements. AUDIT PROCESS. See note.
(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. 6 1 6
(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.
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[[Page 78037]]
1206.57(c)(2)(iii).......... (c) Reporting requirements. 6 1 6
(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 requirements. Burden covered under Sec. 1206.57(c)(2)(i).
(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.
. .
�����������������������������
1206.57(c)(2)(v)............ (c) Reporting requirements. Burden covered under Sec. 1206.57(c)(2)(i).
(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 requirements. AUDIT PROCESS. See note.
(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 requirements. Burden covered under OMB Control Number 1012-
(4) Transportation allowances must 0004. Burden covered under Sec. 1210.52.
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, . . .
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1206.59..................... May I ask ONRR for valuation 20 1 20
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 AUDIT PROCESS. See note.
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. . .
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Part 1206--PRODUCT VALUATION
Subpart E--Indian Gas
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1206.172(b)(1)(ii).......... How do I value gas produced from 4 58 232
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 minimum value 3 11 33
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. . .
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[[Page 78038]]
1206.172(e)(6)(ii).......... (e) Determining the minimum value Burden covered under OMB Control Number 1012-
for royalty purposes of gas sold 0004. Burden covered under Sec. 1210.52.
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;.
. .
1206.172(f)(1)(ii), (f)(2), (f) Excluding some or all tribal 40 1 40
and (f)(3). 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 2 12 24
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 accounting Burden covered under Sec. 1206.173(a)(1).
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 production when Burden covered under OMB Control Number 1012-
an index-based method cannot be 0004. Burden covered under Sec. 1210.52.
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 contracts. AUDIT PROCESS. See note.
(b)(2); (d)(2).
(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 you Burden covered under OMB Control Number 1012-
determine the value of production 0004.
under paragraph (c) of this
section, you must retain all data
relevant to determination of
royalty value.
�����������������������������
1206.174(f)................. (f) Value guidance. You may ask 40 1 40
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.
. .
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[[Page 78039]]
1206.175(d)(4).............. How do I determine quantities and 20 1 20
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 Burden covered under Sec. 1206.173(a)(1).
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 perform Burden covered under Sec.
dual accounting, you must certify 1206.172(b)(1)(ii).
to ONRR that gas flows into such
a pipeline before it is
processed.
----------------------------------------------------------------------------------------------------------------
Transportation Allowances
----------------------------------------------------------------------------------------------------------------
1206.177(c)(2) and (c)(3)... What general requirements Burden covered under Sec. 1206.56(b)(2).
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 transportation AUDIT PROCESS. See note.
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 transportation 20 1 20
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.
1206.178(a)(3)(i) and (ii).. (a) Determining a transportation 40 1 40
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 transportation 15 5 75
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.
[[Page 78040]]
1206.178(b)(2)(iv).......... (b) Determining a transportation 20 1 20
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 transportation 20 1 20
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 transportation 40 1 40
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 transportation 20 1 20
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.
1206.178(b)(5).............. (b) Determining a transportation 40 1 40
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.
-----------------------------------------------
1206.178(d)(1).............. (d) Reporting your transportation AUDIT PROCESS. See note.
allowance.
(1) If ONRR requests, you must
submit all data used to determine
your transportation allowance.
-----------------------------------------------
1206.178(d)(2), (e), and (d) Reporting your transportation Burden covered under OMB Control Number 1012-
(f)(1). allowance. 0004. Burden covered under Sec. 1210.52.
(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.
----------------------------------------------------------------------------------------------------------------
Processing Allowances
----------------------------------------------------------------------------------------------------------------
1206.180(a)(1)(i)........... How do I determine an actual 1 2 2
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's-length 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 AUDIT PROCESS. See note.
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.
-----------------------------------------------
[[Page 78041]]
1206.180(a)(3).............. (a) Determining a processing 40 1 40
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.
1206.180(b)(1)(ii).......... (b) Determining a processing 20 12 240
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.
1206.180(b)(2)(iv).......... (b) Determining a processing 20 1 20
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)....... (b) Determining a processing 20 1 20
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.
1206.180(b)(3).............. (b) Determining a processing 20 1 20
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.
-----------------------------------------------
1206.180(c)(1).............. (c) Reporting your processing AUDIT PROCESS. See note.
allowance.
(1) If ONRR requests, you must
submit all data used to determine
your processing allowance.
-----------------------------------------------
1206.180(c)(2) and (d)...... (c) Reporting your processing Burden covered under OMB Control Number 1012-
allowance. 0004. Burden covered under Sec. 1210.52.
(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.
----------------------------------------------------------------------------------------------------------------
1206.181(c)................. How do I establish processing 40 1 40
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.
----------------------------------------------------------------------------------------------------------------
PART 1207--SALES AGREEMENTS OR CONTRACTS GOVERNING THE DISPOSAL OF LEASE PRODUCTS
Subpart A--General Provisions
----------------------------------------------------------------------------------------------------------------
1207.4(b)................... Contracts made pursuant to old AUDIT PROCESS. See note.
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.
----------------------------------------------------------------------------------------------------------------
[[Page 78042]]
1207.5...................... Contract and sales agreement AUDIT PROCESS. See note.
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................................................................ 148 1,309
----------------------------------------------------------------------------------------------------------------
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 ``non-Hour'' 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
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://www.regulations.gov. Before
including your address, phone number, email address, or other personal
identifying information in your comment, be advised that your entire
comment--including your personal identifying information--may be made
publicly available at any time. While you can ask us in your comment to
withhold from public view your personal identifying information, we
cannot guarantee that we will be able to do so.
Office of the Secretary, Information Collection Clearance Officer:
Laura Dorey (202) 208-2654.
Dated: December 12, 2011.
Gregory J. Gould,
Director, Office of Natural Resources Revenue
[FR Doc. 2011-32158 Filed 12-14-11; 8:45 am]
BILLING CODE 4310-T2-P