# 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 *[email protected]* . 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 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:
| 30 CFR | Reporting and recordkeeping requirement | Hour burden | Average | Annual burden hours |
| --- | --- | --- | --- | --- |
| | | | | |
| | | | | |
| 1202.101 | Standards for reporting and paying royalties | Burden covered under OMB Control Number 1012-0004 (expires 12/31/2012). Burden covered under § 1210.52. | | |
| | | | | |
| 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)? | Burden covered under OMB Control Number 1012-0004. Burden covered under § 1210.52. | | |
| 1202.551(c) | (c) You and all other persons paying royalties on the lease may ask ONRR for permission * * * to report entitlements | 1 | 1 | 1 |
| 1202.558(a) and (b) | What standards do I use to report and pay royalties on gas? | Burden covered under OMB Control Number 1012-0004. Burden covered under § 1210.52. | | |
| | | | | |
| | | | | |
| 1206.56(b)(2) | Transportation allowances—general | 4 | 1 | 4 |
| 1206.57(a)(1)(i) | Determination of transportation allowances | AUDIT PROCESS. See note. | | |
| 1206.57(a)(1)(i) | (a) | Burden covered under § 1206.57(c)(1)(i) and (iii). | | |
| 1206.57(a)(1)(iii) | (a) | AUDIT PROCESS. See note. | | |
| 1206.57(a)(2)(i) | (a) | Burden covered under § 1206.57(a)(3). | | |
| 1206.57(a)(2)(ii) | (a) | 20 | 1 | 20 |
| 1206.57(a)(3) | (a) | 40 | 1 | 40 |
| 1206.57(b)(1) | (b) | Burden covered under § 1206.57(c)(2)(i) and (iii). | | |
| 1206.57(b)(1) | (b) | Burden covered under OMB Control Number 1012-0004. Burden covered under § 1210.52. | | |
| 1206.57(b)(2)(iv) | (b) | 20 | 1 | 20 |
| 1206.57(b)(2)(iv)(A) | (b) | 20 | 1 | 20 |
| 1206.57(b)(3)(i) | (b) | 40 | 1 | 40 |
| 1206.57(b)(3)(ii) | (b) | 20 | 1 | 20 |
| 1206.57(b)(4) | (b) | 20 | 1 | 20 |
| 1206.57(b)(5) | (b) | 20 | 1 | 20 |
| 1206.57(c)(1)(i) | (c) | 4 | 1 | 4 |
| 1206.57(c)(1)(iii) | (c) | 4 | 1 | 4 |
| 1206.57(c)(1)(iv) | (c) | AUDIT PROCESS. See note. | | |
| 1206.57(c)(2)(i) | (c) | 6 | 1 | 6 |
| 1206.57(c)(2)(iii) | (c) | 6 | 1 | 6 |
| 1206.57(c)(2)(iv) | (c) | Burden covered under § 1206.57(c)(2)(i). | | |
| 1206.57(c)(2)(v) | (c) | Burden covered under § 1206.57(c)(2)(i). | | |
| 1206.57(c)(2)(vi) | (c) | AUDIT PROCESS. See note. | | |
| 1206.57(c)(4) and (e)(2) | (c) | Burden covered under OMB Control Number 1012-0004. Burden covered under § 1210.52. | | |
| 1206.59 | May I ask ONRR for valuation guidance? | 20 | 1 | 20 |
| 1206.61(a) and (b) | What records must I keep and produce? | AUDIT PROCESS. See note. | | |
| | | | | |
| | | | | |
| 1206.172(b)(1)(ii) | How do I value gas produced from leases in an index zone? | 4 | 58 | 232 |
| 1206.172(e)(6)(i) and (iii) | (e) | 3 | 11 | 33 |
| 1206.172(e)(6)(ii) | (e) | Burden covered under OMB Control Number 1012-0004. Burden covered under § 1210.52. | | |
| 1206.172(f)(1)(ii), (f)(2), and (f)(3) | (f ) | 40 | 1 | 40 |
| 1206.173(a)(1) | How do I calculate the alternative methodology for dual accounting? | 2 | 12 | 24 |
| 1206.173(a)(2) | (a) | Burden covered under § 1206.173(a)(1). | | |
| 1206.174(a)(4)(ii) | How do I value gas production when an index-based method cannot be used? | Burden covered under OMB Control Number 1012-0004. Burden covered under § 1210.52. | | |
| 1206.174 (b)(1)(i) and (iii); (b)(2); (d)(2) | (b) | AUDIT PROCESS. See note. | | |
| 1206.174(d) | (d)
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. | | |
| 1206.174(f) | (f)
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 | 40 | 1 | 40 |
| 1206.175(d)(4) | How do I determine quantities and qualities of production for computing royalties? | 20 | 1 | 20 |
| 1206.176(b) | How do I perform accounting for comparison? | 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). | | |
| | | | | |
| 1206.177(c)(2) and (c)(3) | What general requirements regarding transportation allowances apply to me? | Burden covered under § 1206.56(b)(2). | | |
| 1206.178(a)(1)(i) | How do I determine a transportation allowance? | 1 | 18 | 18 |
| 1206.178(a)(1)(iii) | (a) | AUDIT PROCESS. See note. | | |
| 1206.178(a)(2)(i) and (ii) | (a) | 20 | 1 | 20 |
| 1206.178(a)(3)(i) and (ii) | (a) | 40 | 1 | 40 |
| 1206.178(b)(1)(ii) | (b) | 15 | 5 | 75 |
| 1206.178(b)(2)(iv) | (b) | 20 | 1 | 20 |
| 1206.178(b)(2)(iv)(A) | (b) | 20 | 1 | 20 |
| 1206.178(b)(3)(i) | (b) | 40 | 1 | 40 |
| 1206.178(b)(3)(ii) | (b) | 20 | 1 | 20 |
| 1206.178(b)(5) | (b) | 40 | 1 | 40 |
| 1206.178(d)(1) | (d) | AUDIT PROCESS. See note. | | |
| 1206.178(d)(2), (e), and (f)(1) | (d) | Burden covered under OMB Control Number 1012-0004. Burden covered under § 1210.52. | | |
| | | | | |
| 1206.180(a)(1)(i) | How do I determine an actual processing allowance? | 1 | 2 | 2 |
| 1206.180(a)(1)(iii) | (a) | AUDIT PROCESS. See note. | | |
| 1206.180(a)(3) | (a) | 40 | 1 | 40 |
| 1206.180(b)(1)(ii) | (b) | 20 | 12 | 240 |
| 1206.180(b)(2)(iv) | (b) | 20 | 1 | 20 |
| 1206.180(b)(2)(iv)(A) | (b) | 20 | 1 | 20 |
| 1206.180(b)(3) | (b) | 20 | 1 | 20 |
| 1206.180(c)(1) | (c) | AUDIT PROCESS. See note. | | |
| 1206.180(c)(2) and (d) | (c) | 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? | 40 | 1 | 40 |
| | | | | |
| | | | | |
| 1207.4(b) | Contracts made pursuant to old form leases | AUDIT PROCESS. See note. | | |
| 1207.5 | Contract and sales agreement retention | AUDIT PROCESS. See note. | | |
| TOTAL BURDEN | | | 148 | 1,309 |
*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://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: November 29, 2011.
Gregory J. Gould,
Director, Office of Natural Resources Revenue.