Agency Information Collection Activities; Proposed Collection; Comment Request

DEPARTMENT OF THE INTERIOR

Minerals Management Service

Agency Information Collection Activities; Proposed Collection;

Comment Request

AGENCY: Minerals Management Service, Interior.

ACTION: Notice.

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SUMMARY: As part of its continuing effort to reduce paperwork and

respondent burden, the Minerals Management Service (MMS) invites the

public and other Federal agencies to comment on a request to reinstate

with change a collection of information contained in an interim final

rule for 30 CFR Part 203, Relief or Reduction in Royalty Rates.

DATES: Submit written comments by August 6, 1996.

ADDRESSES: Direct all written comments to the Department of the

Interior; Minerals Management Service; Mail Stop 4700; 381 Elden

Street; Herndon, Virginia 22070-4817; Attention: Chief, Engineering and

Standards Branch.

FOR FURTHER INFORMATION CONTACT:

Marshall Rose, Chief, Economic Evaluation Branch, Resource Evaluation

Division, Minerals Management Service, telephone (703) 787-1536.

SUPPLEMENTARY INFORMATION:

Title: 30 CFR Part 203, Relief or Reduction in Royalty Rates.

Abstract: The Outer Continental Shelf Lands Act (OCSLA) and the

Deep Water Royalty Relief Act (DWRRA) give the Secretary of the

Interior the authority to reduce or eliminate royalty or any net profit

share set forth in Outer Continental Shelf (OCS) oil and gas leases to

promote increased production.

MMS is issuing an interim rule to establish the terms and

conditions for granting reductions in royalty rates under the OCSLA and

royalty suspension volumes under the DWRRA for certain leases in

existence before November 28, 1995. It also defines the information

required for a complete application as required by 43 U.S.C.

1337(a)(3)(C). The interim final rule was published in the Federal

Register on May 31, 1996 (61 FR 27263).

The MMS uses the information to determine whether granting a

royalty relief request will result in the production of resources that

would not be produced without such relief. An application for royalty

relief must contain sufficient financial, economic, reservoir, geologic

and geophysical, production, and engineering data and information for

MMS to determine whether relief should be granted according to

applicable law. The application also must be sufficient to determine

whether the requested relief will result in an ultimate increase in

resource recovery and receipts to the Federal Treasury and provide for

reasonable returns on project investments.

The applicant's requirement to respond is related only to a request

to obtain royalty relief. The applicant has no obligation to make such

a request. The Paperwork Reduction Act of 1995 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 Office

of Management and Budget (OMB) control number.

The MMS requested OMB to approve emergency processing of this

collection of information to coincide with the effective date of the

interim final rule. This notice provides the full notice and comment

period requirement.

Description of Respondents: Federal OCS oil and gas lessees.

Frequency: On occasion.

Estimated Number of Respondents: 130 lessees making an estimated 54

applications per year.

Estimate of Burden: Average of 835 hours per response.

Estimate of Total Annual Burden Hours: 45,080 burden hours.

[[Page 29131]]

Estimate of Total Annual Cost to Respondents for Hour Burdens:

Based on $35 per hour, the total cost to lessees is estimated to be

$1,577,800.

Estimate of Total Other Annual Costs to Respondents:

There are two other known cost burdens to the respondents.

(a) We will charge lessees (respondents) applying for royalty

relief an amount which covers the cost of processing their

applications. We estimate that our costs for processing OCSLA

applications will range from $8,500 (continuation of production) to

$22,500 (project involving capital expansion). We estimate that our

costs for processing DWRRA applications will range from $27,500 to

$50,000, depending on the number of leases involved and the complexity

of the proposed development project. For some applications

(approximately 30 percent; average of 9 per year), we may need to audit

the financial data to make an adequate determination on the economics

of the proposed development. We estimate an audit to cost up to

$40,000. We will issue a Notice to Lessees (NTL) that will provide more

detailed information on the amounts of royalty relief application

processing costs, and when and how payments are to be made to us for

this purpose. We will revise the NTL periodically to reflect our cost

experience and to provide other information necessary for the

administration of this program. An application processing cost would

average $30,000 for an estimated burden of $1,620,000 ($30,000 x 54

applications=$1,620,000).

(b) A respondent's application or pre-production report must be

accompanied by a report prepared by an independent certified public

accountant as described in Sec. 203.55(c) of the rule. The OCSLA

applications will require this report only once; the DWRRA applications

will require this report at two stages (redetermination and short form

applications are excluded). We estimate an average cost for a report

will be $175,000. The estimated burden is $7,175,000 ($175,000 x 41

applications=$7,175,000).

Type of Request: Reinstatement with change.

OMB Number: 1010-0071.

Form Number: N/A.

Comments: MMS will summarize written responses to this notice and

address them in the regular request for a 3-year OMB approval. Your

comments will also be considered as MMS develops the final rule for 30

CFR Part 203. All comments will become a matter of public record.

(1) MMS specifically solicits comments on the following questions:

(a) Is the proposed collection of information necessary for the

proper performance of MMS's functions, and will it be useful?

(b) Are the estimates of the burden hours of the proposed

collection reasonable?

(c) Do you have any suggestions that would enhance the quality,

clarity, or usefulness of the information to be collected?

(d) Is there a way to minimize the information collection burden on

those who are to respond, including through the use of appropriate

automated electronic, mechanical, or other forms of information

technology?

(2) In addition, the Paperwork Reduction Act of 1995 requires

agencies to estimate the total annual cost burden to respondents or

recordkeepers resulting from the collection of information. MMS needs

your comments on this item. Your response should split the cost

estimate into two components:

(a) Total capital and startup cost component and

(b) Annual operation, maintenance, and purchase of services

component.

Your estimates should consider the costs to generate, maintain, and

disclose or provide the information. You should describe the methods

you use to estimate major costs 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, drilling, and testing equipment; and record storage

facilities. Generally, your estimates should not include equipment or

services purchased: (1) Before October 1, 1995; (2) to comply with

requirements not associated with the information collection; (3) for

reasons other than to provide information or keep records for the

Government; (4) or as part of customary and usual business or private

practices.

Bureau Clearance Officer: Carole A. deWitt, (703) 787-1242.

Dated: May 23, 1996.

Henry G. Bartholomew,

Deputy Associate Director for Operations and Safety Management.

[FR Doc. 96-14268 Filed 6-6-96; 8:45 am]

BILLING CODE 4810-MR-M