# Office of Natural Resources Revenue; Agency Information Collection Activities: 30 CFR Parts 1202, 1206, and 1207, Indian Oil & Gas Valuation—Comment Request
**AGENCY:**
Office of Natural Resources Revenue (ONRR), Interior.
**ACTION:**
Notice of extension.
**SUMMARY:**
To comply with the Paperwork Reduction Act of 1995 (PRA), ONRR is inviting comments on a collection of information requests that we will submit to the Office of Management and Budget (OMB) for review and approval. This Information Collection Request (ICR) covers the paperwork requirements in the regulations under title 30, *Code of Federal Regulations* (CFR), parts 1202, 1206, and 1207. Also, there are five forms associated with this information collection.
**DATES:**
Submit written comments on or before May 15, 2015.
**ADDRESSES:**
You may submit comments on this ICR to ONRR by using one of the following three methods (please reference “ICR 1012-0002” in your comments):
1. 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. ONRR will post all comments.
2. Mail comments to Mr. Luis Aguilar, Regulatory Specialist, ONRR, P.O. Box 25165, MS 61030A, Denver, Colorado 80225-0165.
3. Hand-carry or mail comments, using an overnight courier service, to ONRR. Our courier address is Building 85, Room A-614, Denver Federal Center, West 6th Ave. and Kipling St., Denver, Colorado 80225.
**FOR FURTHER INFORMATION CONTACT:**
For any questions, contact Mr. Luis Aguilar, telephone (303) 231-3418, or email at *[email protected].* You may also contact Mr. Aguilar to obtain copies, at no cost, of (1) the ICR, (2) any associated forms, and (3) the regulations that require us to collect the information.
**SUPPLEMENTARY INFORMATION:**
**I. Abstract**
The Secretary of the United States Department of the Interior is responsible for collecting royalties from lessees who produce minerals from leased Federal and Indian lands and the Outer Continental Shelf (OCS). The Secretary's responsibility, under various laws, is to manage mineral resource production from Federal and Indian lands and the OCS, collect the royalties and other mineral revenues due, and distribute the funds collected under those laws. ONRR performs the royalty management functions for the Secretary.
We have posted those laws pertaining to mineral leases on Federal and Indian lands and the OCS at *http://www.onrr.gov/Laws_R_D/PubLaws/default.htm.*
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.
**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 ONRR-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 ONRR-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 ONRR-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 ONRR-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 ONRR-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 ONRR-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 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 ONRR-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**
ONRR will request OMB approval to continue to collect this information. If ONRR does not collect this information, this would limit the Secretary's ability to discharge fiduciary duties and may also result in the inability to confirm the accurate royalty value. ONRR protects the proprietary information that we receive, and we do not collect items of a sensitive nature.
ONRR requires lessees to respond to this ICR because the information collected is essential in order to determine when net profit share payments are due and to ensure that lessees properly value and pay royalties or net profit share payments. The requirement to respond is mandatory for Form ONRR-4410, Accounting for Comparison [Dual Accounting], and Form ONRR-4411, Safety Net Report, under certain circumstances. And, the lessees are required to submit Forms ONRR-4109, ONRR-4110, and ONRR-4295 in order to obtain a benefit.
**II. Data**
*Title:* 30 CFR parts 1202, 1206, and 1207, Indian Oil and Gas Valuation.
*OMB Control Number:* 1012-0002.
*Bureau Form Number:* Forms ONRR-4109, ONRR-4110, ONRR-4295, ONRR-4410, and ONRR-4411.
*Frequency of Response:* Annually and on occasion.
*Estimated Number and Description of Respondents:* 148 Indian lessees.
*Estimated Annual Reporting and Recordkeeping “Hour” Burden:* 2,269 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 | 1200 |
| 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 | 2,269 |
*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.
**III. Request for Comments**
Section 3506(c)(2)(A) of the PRA 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: (1) Evaluate whether the proposed collection of information is necessary for the agency to perform its duties, including whether the information is useful; (2) evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information; (3) enhance the quality, usefulness, and clarity of the information that ONRR collects; and (4) 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 record-keepers 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 that you use to estimate (1) major cost factors, including system and technology acquisition, (2) expected useful life of capital equipment, (3) discount rate(s), and (4) the period over which you incur costs. Capital and startup costs include, among other items, computers and software that you purchase to prepare for collecting information and 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 Federal 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, free of charge, upon request. We also will post the ICR at *http://www.onrr.gov/Laws_R_D/FRNotices/ICR0103.htm* .
*Public Comment Policy:* ONRR will post all comments, including names and addresses of respondents at *http://www.regulations.gov* . Before including Personally Identifiable Information (PII), such as your address, phone number, email address, or other personal information in your comment(s), you should be aware that your entire comment (including PII) may be made available to the public at any time. While you may ask us, in your comment, to withhold PII from public view, we cannot guarantee that we will be able to do so.
Dated: March 3, 2015.
Gregory J. Gould,
Director, Office of Natural Resources Revenue.