[Federal Register Volume 70, Number 205 (Tuesday, October 25, 2005)]
[Notices]
[Pages 61631-61640]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-21283]



[[Page 61631]]

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DEPARTMENT OF THE INTERIOR

Minerals Management Service


Agency Information Collection Activities: Proposed Collection, 
Comment Request

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Notice of a revision of a currently approved information 
collection (OMB Control Number 1010-0087).

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

SUMMARY: To comply with the Paperwork Reduction Act (PRA) of 1995, we 
are inviting comments on a collection of information that we will 
submit to the Office of Management and Budget (OMB) for review and 
approval. The title of this information collection request (ICR) is 
``30 CFR Part 227--Delegation to States; 30 CFR Part 228--Cooperative 
Activities with States and Indian Tribes; and 30 CFR Part 229--
Delegation to States.'' We changed the title of this ICR to clarify the 
regulatory language we are covering under 30 CFR parts 227, 228, and 
229 and to reflect OMB approval of consolidation of two ICRs, titled:
    <bullet> 1010-0087: 30 CFR Part 228--Cooperative Activities with 
States and Indian Tribes; and
    <bullet> 1010-0088: 30 CFR Part 227--Delegation to States.
    In the two ICRs, much of the general information was repeated and 
cross referenced. This consolidated ICR 1010-0087 eliminates that 
duplication of effort and redundancy of data and, also, includes 30 CFR 
part 229 information collection burden hours, which were not included 
in the previous information collections (1010-0087 and 1010-0088).

DATES: Submit written comments on or before December 27, 2005.

ADDRESSES: Submit written comments to Sharron L. Gebhardt, Lead 
Regulatory Specialist, Minerals Management Service, Minerals Revenue 
Management, P.O. Box 25165, MS 302B2, Denver, Colorado 80225. If you 
use an overnight courier service or wish to hand-carry your comments, 
our courier address is Building 85, Room A-614, Denver Federal Center, 
West 6th Ave. and Kipling Blvd., Denver, Colorado 80225. You may also 
e-mail your comments to us at <a href="/cdn-cgi/l/email-protection#8be6f9e6a5e8e4e6e6eee5fff8cbe6e6f8a5ece4fd"><span class="__cf_email__" data-cfemail="ee839c83c08d8183838b809a9dae83839dc0898198">[email protected]</span></a>. Include the title 
of the information collection and the OMB control number in the 
``Attention'' line of your comment. Also include your name and return 
address. Submit electronic comments as an ASCII file, avoiding the use 
of special characters and any form of encryption. If you do not receive 
a confirmation that we have received your e-mail, contact Ms. Gebhardt 
at (303) 231-3211.

FOR FURTHER INFORMATION CONTACT: Sharron L. Gebhardt, telephone (303) 
231-3211, FAX (303) 231-3781, or e-mail <a href="/cdn-cgi/l/email-protection#e5b68d8497978a8bcba280878d84978191a5888896cb828a93"><span class="__cf_email__" data-cfemail="ebb8838a99998485c5ac8e89838a998f9fab868698c58c849d">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: Title: 30 CFR Part 227--Delegation to 
States; 30 CFR Part 228--Cooperative Activities with States and Indian 
Tribes; and 30 CFR Part 229--Delegation to States.
    OMB Control Number: 1010-0087.
    Bureau Form Number: None.
    Abstract: The Secretary of the U.S. Department of the Interior is 
responsible for collecting royalties from lessees who produce minerals 
from leased Federal and Indian lands. The Secretary is required by 
various laws to manage mineral resources production on Federal and 
Indian lands, collect the royalties due, and distribute the funds in 
accordance with those laws.
    The Secretary also has a trust responsibility to manage Indian 
lands and seek advice and information from Indian beneficiaries. The 
MMS performs the royalty management functions and assists the Secretary 
in carrying out the Department's trust responsibility for Indian lands.
    When a company or an individual enters into a lease to explore, 
develop, produce, and dispose of minerals from Federal or Indian lands, 
that company or individual agrees to pay the lessor a share (royalty) 
of the value received from production from the leased lands. The lease 
creates a business relationship between the lessor and the lessee. The 
lessee is required to report various kinds of information to the 
lessor, relative to the disposition of the leased minerals. Such 
information is similar to data reported to private and public mineral 
interest owners and is generally available within the records of the 
lessee or others involved in developing, transporting, processing, 
purchasing, or selling of such minerals. The information collected 
includes data necessary to ensure that the royalties are accurately 
valued and appropriately paid.
    Sections 202 and 205 of the Federal Oil and Gas Royalty Management 
Act of 1982 (FOGRMA), as amended, authorized the Secretary to develop 
delegated and cooperative agreements with states and Indian tribes to 
carry out certain inspection, auditing, investigation, or limited 
enforcement activities for leases in their jurisdiction. The states and 
Indian tribes are working partners and are an integral part of the 
overall onshore and offshore compliance effort.

Applicable Citations

    Applicable citations of the laws pertaining to this ICR include:
    (1) Public Law 97-451--Jan. 12, 1983, FOGRMA, Sections 202 and 205; 
and
    (2) Public Law 104-185, as corrected by Public Law 104-200, the 
Federal Oil and Gas Royalty Simplification and Fairness Act of 1996 
(RSFA).
    Relevant parts of the Code of Federal Regulations (CFR) include 30 
CFR parts 227, 228, and 229, as described below:
    Title 30 CFR part 227, Delegation to States, provides procedures to 
delegate certain Federal royalty management functions to states for 
Federal oil and gas, geothermal, and solid mineral leases and leases 
subject to 8(g) of the Outer Continental Shelf Lands Act, within their 
state boundaries.
    Title 30 CFR part 228, Cooperative Activities with States and 
Tribes, provides procedures to utilize the capabilities of the Indian 
tribes to carry out audits and related investigations of their 
respective leased lands.
    Title 30 CFR part 229, Delegation to States, provides procedures to 
utilize the capabilities of the states to carry out audits and related 
investigations of leased Indian lands within their respective state 
boundaries, by permission of the respective Indian tribal councils or 
individual Indian mineral owners.
    Effective September 11, 1997, parts 228 and 229 do not apply to 
Federal lands, due to implementation of RSFA amendments.

Delegation to States, 30 CFR Part 227

    The states audit Federal lands under provisions of 30 CFR part 227. 
The Secretary is authorized under Section 205 of FOGRMA, as amended by 
RSFA, to delegate to states, all or part of authorities and 
responsibilities of the Secretary, to conduct inspections, audits, 
investigations, and limited enforcement activities for leases in their 
jurisdiction.
    The RSFA amended FOGRMA Section 205 to include all of the following 
royalty management functions on Federal lands:
    a. Conducting audits and investigations;
    b. Receiving and processing production and royalty reports;
    c. Correcting erroneous report data;
    d. Performing automated verification;
    e. Issuing demands and subpoenas (except for solid mineral and 
geothermal leases);
    f. Issuing orders to perform restructured accounting; and
    g. Issuing related tolling agreements and notices to lessees or 
their designees.

[[Page 61632]]

    The states perform nearly all audits on Federal leases within their 
boundaries and typically receive 50 percent of any additional 
collections; however, Alaska typically receives 90 percent of onshore 
royalties. Many states gain efficiencies by performing audits on state 
severance taxes and concurrently on properties that have both Federal 
and state interests. Federal royalties are a significant portion of 
many states' annual budgets.
    To be considered for delegation under 30 CFR part 227, states must 
submit a written delegation proposal to, and receive approval from, the 
MMS Associate Director for Minerals Revenue Management (MRM). 
Delegation agreements benefit both MMS and states by helping to ensure 
correct and timely production reporting, proper product valuation, and 
accurate and timely royalty payment through the application of an 
aggressive and comprehensive audit program.
    Eleven states currently have MMS-approved delegation agreements to 
perform audits and investigations, which are the functions previously 
authorized under FOGRMA. The most recent delegated agreement was 
established in 2004 between MMS and the state of Alaska. Since the 
final rulemaking of Delegation of Royalty Management Functions to 
States on August 12, 1997 (62 FR 43076), effective September 11, 1997, 
one state has proposed a delegation agreement to assume the automated 
verification functions authorized by RSFA.
    When a state performs any of the delegated functions under 30 CFR 
part 227, the state also assumes the burden of providing various types 
of information to MMS. Under RSFA, and to properly administer the 
delegation of the functions to the requesting states, MRM must collect 
pertinent information from industry and states to ensure that this 
program continues to operate efficiently and effectively.
    Companies send all royalty reports and payments (ICR 1010-0140, 
expires October 31, 2006) and production reports (ICR 1010-0139, 
expires August 31, 2006) to MRM. The MRM verifies the accuracy of the 
reports and payments prior to disbursing the funds to states, Indian 
tribes, individual Indian mineral owners, the U.S. Treasury, and other 
Federal agencies. If states choose to participate in the delegable 
function of receiving and processing financial and production reports, 
payors/reporters must send these reports to each participating state 
for the Federal leases within that state and to MRM for the remaining 
Federal leases. The states must verify the accuracy of these reports.
    The MRM currently handles production and royalty reporting, error 
correction, automated verification, issuing demand letters, and billing 
actions. Although one state has requested the automated verification 
functions, if another state does in the future, payors/reporters may 
have to work with and provide data to various contacts in the 
participating state(s) and in MRM. At this time, MRM has not approved 
the state for said functions.
    In addition, MRM is held accountable to certain measurements and 
standards and must file reports to outside entities. States choosing to 
participate in any delegable function will be held to these same 
measurements and standards and, therefore, will have to provide data to 
document the work they are performing. This information, provided to 
MMS in the course of performing delegated agreements, is the focus of 
this information collection. States must comply with Generally Accepted 
Accounting Principles (GAAP) and MMS standards, as required under 30 
CFR 227.200, and with the MMS Audit Procedures Manual and Generally 
Accepted Government Auditing Standards (GAGAS), as required under 30 
CFR 227.301.

Cooperative Activities With State and Indian Tribes, 30 CFR Part 228

    Effective September 11, 1997, part 228 does not apply to Federal 
lands.
    The Secretary is authorized under FOGRMA Section 202, Cooperative 
Agreements, as amended by RSFA Section 8, to enter into cooperative 
agreements with any state or Indian tribe upon their written request; 
to share oil or gas royalty management information; and to use the 
capabilities of states and Indian tribes to carry out inspection, 
royalty audit, and related investigation.
    At this time, no state has proposed to enter into a cooperative 
agreement or to undertake activities on Indian lands within the state.
    Cooperative activities benefit both MMS and Indian tribes by 
helping to ensure accurate and timely production reporting, proper 
product valuation, and accurate and timely royalty payment through the 
application of an aggressive and comprehensive audit program.
    Indian tribes currently manage audits for 88 percent of all tribal 
mineral royalties. Major focuses in FY 2007 provide for additional 
funding for a new tribal cooperative agreement with the Hopi Tribe and 
additional full-time MMS employees to provide increased oversight of 
Indian tribal audits due to a recent court decision.
    To be considered for a cooperative audit agreement, Indian tribes 
must comply with the regulations at 30 CFR part 228. Indian tribes who 
want to do royalty audits in cooperation with MMS must submit a written 
proposal to enter into a cooperative agreement, signed by the tribal 
chairman or other appropriate official, to the MMS Director. The 
request should outline the activities to be undertaken and present 
evidence that the Indian tribe(s) can meet the standards established by 
the Secretary for the activities to be conducted. Prior to beginning 
work, approval must be obtained from the MMS Director.
    Currently, there are no states with cooperative agreements. 
However, eight Indian tribes currently have cooperative agreements to 
perform audits and investigations. When an Indian tribe performs any of 
the cooperative activities under 30 CFR part 228, the Indian tribe also 
assumes the burden of providing various types of information to MMS. 
This information, provided to MMS in the course of performing 
cooperative agreements, is the focus of this information collection. 
After the request is accepted and a cooperative agreement is in effect, 
Indian tribes must submit an annual workplan and budget, as well as 
quarterly reimbursement vouchers. They must follow GAAP and MMS 
standards as required under 30 CFR 228.102. The cooperative agreements 
also require them to comply with the MMS Audit Procedures Manual and 
GAGAS.

Delegation to States, 30 CFR Part 229

    Effective September 11, 1997, part 229 does not apply to Federal 
lands.
    Under the Secretary's delegation of authority at this part, a state 
may conduct audits and related investigations of oil and gas payments 
made to MMS regarding leased Indian lands within the state's 
boundaries. A state must receive written permission from the respective 
Indian tribe(s) or individual Indian mineral owner(s).
    After receiving written permission, the governor or other 
authorized official of a state may petition the Secretary to assume 
responsibilities of conducting audits and related investigation of 
Indian oil and gas leases. A state petitioning for a delegation of 
authority will have the opportunity to present testimony at a public 
hearing within the state.
    After the state receives approval of the Secretary's delegation of 
authority, it must submit annual audit work plans detailing its audits 
and related investigations, annual budgets, and

[[Page 61633]]

quarterly reimbursement vouchers. The state shall maintain books and 
records and provide a quarterly summary of costs following Department 
standards, as required under 30 CFR 229.109.
    Title 30 CFR 229.101(b), covering the Federal Government's 
administration of delegations, states:
    (b) A State may enter into a delegation of authority under this 
part without affecting a State's ability to enter into a cooperative 
agreement under Part 228 of this chapter.
    At this time no state has proposed to undertake delegated functions 
on Indian lands within its boundaries.

Summary

    Proprietary information submitted to MMS under this collection is 
protected. No items of a sensitive nature are collected. The 
opportunity to engage in these programs is voluntary; however, if MMS 
approval for the cooperative agreement or delegation is obtained, the 
requirement to respond is mandatory.
    Frequency of Response: Varies based on the function performed.
    Estimated Number and Description of Respondents: 11 states and 8 
Indian tribes.
    Estimated Annual Reporting and Recordkeeping ``Hour'' Burden: 6,309 
hours.
    We are revising this ICR to include reporting requirements, part 
229 citations, that were overlooked in the previous renewal, and we 
have adjusted the burden hours accordingly.
    The MMS estimates 767 responses each year from the 11 states and 8 
Indian tribes. We estimate the total annual burden is 6,309 (4,309 for 
states and 2,000 for Indian tribes) reporting and recordkeeping hours. 
Due to the complexity of the chart below, we are detailing the number 
of burden hours for the states and Indian tribes.
    <bullet> States: We estimate 701 responses (685 from 30 CFR part 
227 and 16 from 30 CFR part 229) from 11 states. We estimate the total 
annual burden for these responses is 4,309 reporting and recordkeeping 
hours (4,293 from 30 CFR part 227 and 16 from 30 CFR part 229) due to 
historical information.
    <bullet> Indian tribes: We estimate 66 responses (from 30 CFR part 
228) from 8 Indian tribes. We estimate the total annual burden for 
these responses is 2,000 reporting and recordkeeping hours due to 
historical information.
    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.

                                                       Respondent's Estimated Annual Burden Hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Hour burden per  Number of annual    Annual burden
                 30 CFR Section                       Reporting and recordkeeping requirements          response          responses           hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Part 227--Delegation to States
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Delegation Proposals
--------------------------------------------------------------------------------------------------------------------------------------------------------
227.103........................................  What must a State's delegation proposal contain?.               200                 1               200
                                                 If you want MMS to delegate royalty management
                                                  functions to you, then you must submit a
                                                  delegation proposal to the MMS Associate
                                                  Director for Minerals Revenue Management. MMS
                                                  will provide you with technical assistance and
                                                  information to help you prepare your delegation
                                                  proposal * * *.
------------------------------------------------
                                                                   Delegation Process
--------------------------------------------------------------------------------------------------------------------------------------------------------
227.107........................................  When will the MMS Director decide whether to             Hour burden covered under Sec.   227.103.
                                                  approve a State's delegation proposal?.
                                                 The MMS Director will decide whether to approve
                                                  your delegation proposal within 90 days after
                                                  your delegation proposal is considered complete
                                                  under Sec.   227.104. MMS may extend the 90-day
                                                  period with your written consent..
------------------------------------------------
227.109........................................  What if the MMS Director denies a State's                Hour burden covered under Sec.   227.103.
                                                  delegation proposal?.
                                                 If the MMS Director denies your delegation
                                                  proposal, MMS will state the reasons for denial.
                                                  MMS also will inform you in writing of the
                                                  conditions you must meet to receive approval.
                                                  You may submit a new delegation proposal at any
                                                  time following a denial..
227.110(a).....................................  When and for how long are delegation agreements          Hour burden covered under Sec.   227.103.
                                                  effective?.
                                                 (a) Delegation agreements are effective for 3
                                                  years from the date the MMS Director signs the
                                                  delegation agreement. However, during the
                                                  development of the State's delegation proposal
                                                  under Sec.   227.108 of this part, MMS, the
                                                  delegated State, and any other affected person
                                                  will determine an appropriate transition period
                                                  for lessees and their designees to modify their
                                                  systems to comply with any new requirements
                                                  under a delegation agreement * * *.

[[Page 61634]]

 
227.110(b) and (b)(1)..........................  (b) You may ask MMS to renew the delegation for          Hour burden covered under Sec.   227.103.
                                                  an additional 3 years no less than 6 months
                                                  before your 3-year delegation agreement expires.
                                                  You must submit your renewal request to the MMS
                                                  Associate Director for Minerals Revenue
                                                  Management as follows: (1) If you do not want to
                                                  change the terms of your delegation agreement
                                                  for the renewal period, you need only ask to
                                                  extend your existing agreement for the 3-year
                                                  renewal period * * *
227.110(b)(2)..................................  (b)(2) If you want to change the terms of your                   15                11               165
                                                  delegation agreement for the renewal period, you
                                                  must submit a new delegation proposal under this
                                                  part.
227.110(c).....................................  (c) The MMS Director may approve your renewal            Hour burden covered under Sec.   227.103.
                                                  request only if MMS determines that you are
                                                  meeting the requirements of the applicable
                                                  standards and regulations. If the MMS Director
                                                  denies your renewal request, MMS will state the
                                                  reasons for denial. MMS also will inform you in
                                                  writing of the conditions you must meet to
                                                  receive approval. You may submit a new renewal
                                                  request any time after denial.
227.110(d).....................................  (d) After the 3-year renewal period for your             Hour burden covered under Sec.   227.103.
                                                  delegation agreement ends, if you wish to
                                                  continue performing one or more delegated
                                                  functions, you must request a new delegation
                                                  agreement from MMS under this part. MMS will
                                                  schedule a hearing on your request, if MMS
                                                  determines a hearing is appropriate * * *.
227.110(e).....................................  (e) If you do not request a hearing under                Hour burden covered under Sec.   227.103.
                                                  paragraphs (b)(1) or (d) of this section, any
                                                  other affected person may submit a written
                                                  request for a hearing under those paragraphs to
                                                  the MMS Associate Director for Minerals Revenue
                                                  Management.
------------------------------------------------
                                                                  Existing Delegations
--------------------------------------------------------------------------------------------------------------------------------------------------------
227.111(a) and (b).............................  Do existing delegation agreements remain in              Hour burden covered under Sec.   227.103.
                                                  effect?.
                                                 This section explains your options if you have a
                                                  delegation agreement in effect on the effective
                                                  date of this regulation.
                                                 (a) * * * Before the agreement expires, if you
                                                  wish to continue to perform one or more of the
                                                  delegated functions you performed under the
                                                  expired agreement, you must request a new
                                                  delegation agreement meeting the requirements of
                                                  this part and the applicable standards.
                                                 (b) If you want to perform royalty management
                                                  functions in addition to those authorized under
                                                  your existing agreement, you must request a new
                                                  delegation agreement.
------------------------------------------------
                                                                      Compensation
--------------------------------------------------------------------------------------------------------------------------------------------------------
227.112(d).....................................  What compensation will a State receive to perform                 4                84               336
                                                  delegated functions?.                                                (NOTE: 5 states
                                                 You will receive compensation for your costs to                           x 12 montly
                                                  perform each delegated function subject to the                        responses = 60
                                                  following conditions * * *.                                         and 6 states x 4
                                                 (d) At a minimum, you must provide vouchers                                 quarterly
                                                  detailing your expenditures quarterly during the                     responses = 24)
                                                  fiscal year. However, you may agree to provide
                                                  vouchers on a monthly basis in your delegation
                                                  agreement;.
227.112(e).....................................  (e) You must maintain adequate books and records       Hour burden covered under Sec.   227.200(d).
                                                  to support your vouchers * * *.
------------------------------------------------

[[Page 61635]]

 
                                                 States' Responsibilities To Perform Delegated Functions
--------------------------------------------------------------------------------------------------------------------------------------------------------
227.200(a)(b), (c), and (d)....................  What are a State's general responsibilities if it               200                11             2,200
                                                  accepts a delegation?.
                                                 For each delegated function you perform, you
                                                  must: (a) * * * seek information or guidance
                                                  from MMS regarding new, complex, or unique
                                                  issues.* * *.
                                                 (b)(1) * * * Provide complete disclose of
                                                  financial results of activities;.
                                                 (2) Maintain correct and accurate records of all
                                                  mineral-related transactions and accounts;.
                                                 (3) Maintain effective controls and
                                                  accountability;.
                                                 (4) Maintain a system of accounts * * *..........
                                                 (5) Maintain adequate royalty and production
                                                  information * * *.
                                                 (c) Assist MMS in meeting the requirements of the
                                                  Government Performance and Results Act (GPRA) *
                                                  * *.
                                                 (d) Maintain all records you obtain or create
                                                  under your delegated function, such as royalty
                                                  reports, production reports, and other related
                                                  information. * * * You must maintain such
                                                  records for at least 7 years. * * *.
227.200(e) and (h).............................  What are a State's general responsibilities if it                 3                44               132
                                                  accepts a delegation?.
                                                 * * * (e) Provide reports to MMS about your
                                                  activities under your delegated functions * * *
                                                  At a minimum, you must provide periodic
                                                  statistical reports to MMS summarizing the
                                                  activities you carried out * * *.
                                                 (h) Help MMS respond to requests for information
                                                  from other Federal agencies, Congress, and the
                                                  public * * *.
227.200(f).....................................  What are a State's general responsibilities if it                 1               250               250
                                                  accepts a delegation?.
                                                 * * * (f) Assist MMS in maintaining adequate
                                                  reference, royalty, and production databases * *
                                                  *.
227.200(g) and 227.301(e)......................  Sec.   227.200 What are a State's general                        60                11               660
                                                  responsibilities if it accepts a delegation? * *
                                                  *.
                                                 (g) Develop annual work plans * * *..............
                                                 Sec.   227.301 What are a State's
                                                  responsibilities if it performs audits?.
                                                 If you perform audits you must * * *.............
                                                 (e) Prepare and submit MMS Audit Work Plans * * *
227.400(a)(4) and (a)(6).......................  What functions may a State perform in processing                  1               250               250
                                                  production reports or royalty reports?.
                                                 Production reporters or royalty reporters provide
                                                  production, sales, and royalty information on
                                                  mineral production from leases that must be
                                                  collected, analyzed, and corrected.
                                                 (a) If you request delegation of either
                                                  production report or royalty report processing
                                                  functions, you must perform * * *.
                                                 (4) Timely transmitting production report or
                                                  royalty report data to MMS and other affected
                                                  Federal agencies * * *.
                                                 (6) Providing production data or royalty data to
                                                  MMS and other affected Federal agencies * * *.
227.400(c).....................................  What functions may a State perform in processing                  1                12                12
                                                  production reports or royalty reports?.
                                                 (c) You must provide MMS with a copy of any
                                                  exceptions from reporting and payment
                                                  requirements for marginal properties and any
                                                  alternative royalty and payment requirements for
                                                  unit agreements and communitization agreements
                                                  you approve.
227.401(d).....................................  What are a State's responsibilities if it            Hour burden covered under Sec.   227.400(a)(4) and
                                                  processes production reports or royalty reports?.                        (a)(6).
                                                 In processing production reports or royalty
                                                  reports you must * * *.
                                                 (d) Timely transmit required production or
                                                  royalty data to MMS and other affected Federal
                                                  agencies * * *.

[[Page 61636]]

 
227.401(e).....................................  What are a State's responsibilities if it               Hour burden covered under Sec.   227.200(f).
                                                  processes production reports or royalty reports?.
                                                 In processing production reports or royalty
                                                  reports you must * * *.
                                                 (e) Access well, lease, agreement, and reporter
                                                  reference data from MMS, and provide updated
                                                  information to MMS * * *.
227.501(c).....................................  What are a State's responsibilities to ensure        Hour burden covered under Sec.   227.400(a)(4) and
                                                  that reporters correct erroneous data?.                                  (a)(6).
                                                 (c) Submit accepted and corrected lines to MMS to
                                                  allow processing in a timely manner * * *.
227.601(c).....................................  What are a State's responsibilities if it                         8                11                88
                                                  performs automated verification?.
                                                 To perform automated verification of production
                                                  reports or royalty reports, you must * * *.
                                                 (c) Maintain all documentation and logging
                                                  procedures * * *.
227.601(d).....................................  What are a State's responsibilities if it              Hour burden covered under Sec.   227.200(f).
                                                  performs automated verification?.
                                                 To perform automated verification of production
                                                  reports or royalty reports, you must * * *.
                                                 (d) Access well, lease, agreement, and production
                                                  reporter or royalty reporter reference date from
                                                  MMS and provide updated information to MMS * * *.
------------------------------------------------
                                                                   Performance Review
--------------------------------------------------------------------------------------------------------------------------------------------------------
227.801(a).....................................  What if a State does not adequately perform a          Hour burden covered under Sec.   227.200(e).
                                                  delegated function?.
                                                 If your performance of the delegated function
                                                  does not comply with your delegation agreement *
                                                  * *.
                                                 (a) * * * You may ask MMS for an extension of
                                                  time to comply with the notice. In your
                                                  extension request you must explain why you need
                                                  more time * * *.
227.804........................................  How else may a State's delegation agreement            Hour burden covered under Sec.   227.200(e).
                                                  terminate?.
                                                 You may request MMS to terminate your delegation
                                                  at any time by submitting your written notice of
                                                  intent 6 months prior to the date on which you
                                                  want to terminate. * * *.
227.805........................................  How may a State obtain a new delegation agreement        Hour burden covered under Sec.   227.103
                                                  after termination?.
                                                 After your delegation agreement is terminated,
                                                  you may apply again for delegation by beginning
                                                  with the proposal process * * *.
------------------------------------------------
                                                                 Subtotal Burden for 30 CFR part 227                               685             4,293
------------------------------------------------
                           Part 228--Cooperative Activities With States and Indian Tribes
---------------------------------------------------------------------------------------------------------------------
                                           Subpart C--Oil and Gas, Onshore
---------------------------------------------------------------------------------------------------------------------
228.100(a) and (b).............................  Entering into an agreement.......................               200                 1               200
                                                 (a) * * * Indian tribe may request the Department
                                                  to enter into a cooperative agreement by sending
                                                  a letter from * * * tribal chairman * * * to the
                                                  Director of MMS.
                                                 (b) The request for an agreement shall be in a
                                                  format prescribed by MMS and should include at a
                                                  minimum the following information:.
                                                 (1) Type of eligible activities to be undertaken.
                                                 (2) Proposed term of the agreement...............
                                                 (3) Evidence that * * * Indian tribe meets, or
                                                  can meet by the time the agreement is in effect
                                                  * * *.
                                                 (4) If the State is proposing to undertake
                                                  activities on Indian lands located within the
                                                  State, a resolution from the appropriate tribal
                                                  council indicating their agreement to delegate
                                                  to the State responsibilities under the terms of
                                                  the cooperative agreement for activities to be
                                                  conducted on tribal or allotted land.
228.101(a).....................................  Terms of agreement...............................                15                 8               120
                                                 (a) Agreements entered into under this part shall
                                                  be valid for a period of 3 years and shall be
                                                  renewable * * * upon request of * * * Indian
                                                  tribe * * *.

[[Page 61637]]

 
228.101(c).....................................  (c) * * * Indian tribe may unilaterally terminate      Hour burden covered under Sec.   228.100(a).
                                                  an agreement by giving a 120-day written notice
                                                  of intent to terminate.
228.101(d).....................................  Terms of Agreement...............................                80                 1                80
                                                 (d) * * * Indian tribe will be given 60 days to
                                                  respond to the notice of deficiencies and to
                                                  provide a plan for correction of those
                                                  deficiencies * * *.
228.103(a) and (b).............................  Maintenance of records...........................               120                 8               960
                                                 (a) * * * Indian tribe entering into a
                                                  cooperative agreement under this part must
                                                  retain all records, reports, working papers, and
                                                  any backup materials * * *.
                                                 (b) * * * Indian tribe shall maintain all books
                                                  and records * * *.
228.105(a)(1) and (a)(2).......................  Funding of cooperative agreements................                60                 8               480
                                                 (a)(1) The Department may, under the terms of the
                                                  cooperative agreement, reimburse * * * Indian
                                                  tribe up to 100 percent of the costs of eligible
                                                  activities. Eligible activities will be agreed
                                                  upon annually upon the submission and approval
                                                  of a work plan and funding requirement.
                                                 (2) A cooperative agreement may be entered into
                                                  with * * * Indian tribe, upon request, without a
                                                  requirement for reimbursement of costs by the
                                                  Department.
228.105(c).....................................  Funding of cooperative agreements................                 4                40               160
                                                 (c) * * * Indian tribe shall submit a voucher for                    (NOTE: 1 tribe x
                                                  reimbursement of eligible costs incurred within                           12 monthly
                                                  30 days of the end of each calendar quarter * *                       responses = 12
                                                  * Indian tribe must provide the Department a                        and 7 tribes x 4
                                                  summary of costs incurred, for which * * *                                 quarterly
                                                  Indian tribe is seeking reimbursement, with the                      responses = 28)
                                                  voucher.
228.107(b).....................................  Eligible cost of activities......................  Hour burden covered under Sec.   228.100(a) and (b).
                                                 (b) * * * Each cooperative agreement shall
                                                  contain detailed schedules identifying those
                                                  activities and costs which qualify for funding
                                                  and the procedures, timing, and mechanics for
                                                  implementing Federal funding.
------------------------------------------------
                                                                 Subtotal Burden for 30 CFR part 228                                66             2,000
------------------------------------------------
                                           Part 229--Delegation to States
---------------------------------------------------------------------------------------------------------------------
                                           Subpart C--Oil and Gas, Onshore
---------------------------------------------------------------------------------------------------------------------
                                            Administration of Delegations
---------------------------------------------------------------------------------------------------------------------
229.100(a)(1) and (a)(2).......................  Authorities and responsibilities subject to                       1                 1                 1
                                                  delegation.
                                                 (a) All or part of the following authorities and
                                                  responsibilities of the Secretary under the Act
                                                  may be delegated to a State authority:.
                                                 (1) Conduct of audits related to oil and gas
                                                  royalty payments made to the MMS which are
                                                  attributable to leased * * * Indian lands within
                                                  the State. Delegations with respect to any
                                                  Indian lands require the written permission,
                                                  subject to the review of the MMS, of the
                                                  affected Indian tribe or allottee.
                                                 (2) Conduct of investigation related to oil and
                                                  gas royalty payments made to the MMS which are
                                                  attributable to * * * Indian lands within the
                                                  State. Delegation with respect to any Indian
                                                  lands require the written permission, subject to
                                                  the review of the MMS, of the affected Indian
                                                  tribe or allottee. No investigation will be
                                                  initiated without the specific approval of the
                                                  MMS * * *.

[[Page 61638]]

 
229.101(a) and (d).............................  Petition for delegation..........................                 1                 1                 1
                                                 (a) The governor or other authorized official of
                                                  any State which contains * * * Indian oil and
                                                  gas leases where the Indian tribe and allottees
                                                  have given the State an affirmative indication
                                                  of their desire for the State to undertake
                                                  certain royalty management-related activities on
                                                  their lands, may petition the Secretary to
                                                  assume responsibilities to conduct audits and
                                                  related investigations of royalty related
                                                  matters effecting * * * Indian oil and gas
                                                  leases within the State * * *.
                                                 (d) In the event that the Secretary denies the
                                                  petition, the Secretary must provide the State
                                                  with the specific reasons for denial of the
                                                  petition. The State will then have 60 days to
                                                  either contest or correct specific deficiencies
                                                  and to reapply or a delegation of authority.
229.102(c).....................................  Fact-finding and hearings........................                 1                 1                 1
                                                 (c) A State petitioning for a delegation of
                                                  authority shall be given the opportunity to
                                                  present testimony at a public hearing.
229.103(c).....................................  Duration of delegations; termination of                           1                 1                 1
                                                  delegations.
                                                 (c) A State may terminate a delegation of
                                                  authority by giving a 120-day written notice of
                                                  intent to terminate.
229.105........................................  Evidence of Indian agreement to delegation.......                 1                 1                 1
                                                 In the case of a State seeking a delegation of
                                                  authority for Indian lands * * * the State
                                                  petition to the Secretary must be supported by
                                                  an appropriate resolution or resolutions or
                                                  tribal councils joining the State in petitioning
                                                  for delegation and evidence of the agreement of
                                                  individual Indian allottees whose lands would be
                                                  involved in a delegation. Such evidence shall
                                                  specifically speak to having the State assume
                                                  delegated responsibility for specific functions
                                                  related to royalty management activities.
229.106........................................  Withdrawal of Indian lands from delegated                         1                 1                 1
                                                  authority.
                                                 If at any time an Indian tribe or an individual
                                                  Indian allottee determines that it wishes to
                                                  withdraw from the State delegation of authority
                                                  in relation to its lands, it may do so by
                                                  sending a petition of withdrawal to the State *
                                                  * *.
229.109(a).....................................  Reimbursement for costs incurred by a State under                 1                 1                 1
                                                  the delegation of authority..
                                                 (a) The Department of the Interior (DOI) shall
                                                  reimburse the State for 100 percent of the
                                                  direct cost associated with the activities
                                                  undertaken under the delegation of authority.
                                                  The State shall maintain books and records in
                                                  accordance with the standards established by the
                                                  DOI and will provide the DOI, on a quarterly
                                                  basis, a summary of costs incurred * * *.
229.109(b).....................................  Reimbursement for costs incurred by a State under                 1                 1                 1
                                                  the delegation of authority.
                                                 (b) The State shall submit a voucher for
                                                  reimbursement of costs incurred within 30 days
                                                  of the end of each calendar quarter.
229.120........................................  Obtaining regulatory and policy guidance.........                 1                 1                 1
                                                 All activities performed by a State under a
                                                  delegation must be in full accord with all
                                                  Federal laws, rules and regulations, and
                                                  Secretarial and agency determinations and orders
                                                  relating to the calculation, reporting, and
                                                  payment of oil and gas royalties. In those cases
                                                  when guidance or interpretations are necessary,
                                                  the State will direct written requests for such
                                                  guidance or interpretation to the appropriate
                                                  MMS officials * * *.

[[Page 61639]]

 
229.121(a), (b), (c), and (d)..................  Recordkeeping requirements.......................                 1                 1                 1
                                                 (a) The State shall maintain in a safe and secure
                                                  manner all records, workpapers, reports, and
                                                  correspondence gained or developed as a
                                                  consequence of audit or investigative activities
                                                  conducted under the delegation * * *.
                                                 (b) The State must maintain in a confidential
                                                  manner all data obtained from DOI sources or
                                                  from payor or company sources under the
                                                  delegation * * *.
                                                 (c) All records subject to the requirements of
                                                  paragraph (a) must be maintained for a 6-year
                                                  period measured from the end of the calendar
                                                  year in which the records were created * * *
                                                  Upon termination of a delegation, the State
                                                  shall, within 90 days from the date of
                                                  termination, assemble all records specified in
                                                  subsection (a), complete all working paper files
                                                  in accordance with Sec.   229.124, and transfer
                                                  such records to the MMS.
                                                 (d) The State shall maintain complete cost
                                                  records for the delegation in accordance with
                                                  generally accepted accounting principles * * *.
229.122(a), (b), and (c).......................  Coordination of audit activities.................                 1                 1                 1
                                                 (a) Each State with a delegation of authority
                                                  shall submit annually to the MMS an audit
                                                  workplan specifically identifying leases,
                                                  resources, companies, and payors scheduled for
                                                  audit * * * A State may request changes to its
                                                  workplan * * * at the end of each quarter of
                                                  each fiscal year. All requested changes are
                                                  subject to approval by the MMS and must be
                                                  submitted in writing.
                                                 (b) When a State plans to audit leases of a
                                                  lessee or royalty payor for which there is an
                                                  MMS or OIG resident audit team, all audit
                                                  activities must be coordinated through the MMS
                                                  or OIG resident supervisor * * *.
                                                 (c) The State shall consult with the MMS and/or
                                                  OIG regarding resolution of any coordination
                                                  problems encountered during the conduct of
                                                  delegation activities.
229.123(b)(3)(i)...............................  Standards for audit activities...................                 1                 1                 1
                                                 (b) * * * (3) Standards of reporting. (i) Written
                                                  audit reports are to be submitted to the
                                                  appropriate MMS officials at the end of each
                                                  field examination.
229.124........................................  Documentation standards..........................                 1                 1                 1
                                                 Every audit performed by a State under a
                                                  delegation of authority must meet certain
                                                  documentation standards. In particular, detailed
                                                  workpapers must be developed and maintained.
229.125(a) and (b).............................  Preparation and issuance of enforcement documents                 1                 1                 1
                                                 (a) Determinations of additional royalties due
                                                  resulting from audit activities conducted under
                                                  a delegation of authority must be formally
                                                  communicated by the State, to the companies or
                                                  other payors by an issue letter prior to any
                                                  enforcement action * * *.
                                                 (b) After evaluating the company or payor's
                                                  response to the issue letter, the State shall
                                                  draft a demand letter which will be submitted
                                                  with supporting workpaper files to the MMS for
                                                  appropriate enforcement action. Any substantive
                                                  revisions to the demand letter will be discussed
                                                  with the State prior to issuance of the letter *
                                                  * *.
229.126(a) and (b).............................  Appeals..........................................                 1                 1                 1
                                                 (a) * * * The State regulatory authority shall,
                                                  upon the request of the MMS, provide competent
                                                  and knowledgeable staff for testimony, as well
                                                  as any required documentation and analyses, in
                                                  support of the lessor's position during the
                                                  appeal process.
                                                 (b) An affected State, upon the request of the
                                                  MMS, shall provide expert witnesses from their
                                                  audit staff for testimony as well as required
                                                  documentation and analyses to support the
                                                  Department's position during the litigation of
                                                  court cases arising from denied appeals * * *.
------------------------------------------------

[[Page 61640]]

 
229.127........................................  Reports from States..............................                 1                 1                 1
                                                 The State, acting under the authority of the
                                                  Secretarial delegation, shall submit quarterly
                                                  reports which will summarize activities carried
                                                  out by the State during the preceding quarter of
                                                  the year under the provisions of the delegation
                                                  * * *.
------------------------------------------------
                                         Subtotal Burden for 30 CFR part 229                                                        16                16
---------------------------------------------------------------------------------------------------------------------
                                                    TOTAL BURDEN                                                                   767             6,309
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Estimated Annual Reporting and Recordkeeping ``Non-hour Cost'' 
Burden: We have identified the ``non-hour cost'' burden at $20,000 as 
annual start-up costs.
    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 notice * * * 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. The ICR also will be posted on our 
Web site at http://www.mrm.mms.gov/Laws_R_D/FRNotices/FRInfColl.htm.
    Public Comment Policy: We will post all comments in response to 
this notice on our Web site at http://www.mrm.mms.gov/Laws_R_D/FRNotices/FRInfColl.htm. We also will make copies of the comments 
available for public review, including names and addresses of 
respondents, during regular business hours at our offices in Lakewood, 
Colorado. Upon request, we will withhold an individual respondent's 
home address from the public record, as allowable by law. There also 
may be circumstances in which we would withhold a respondent's 
identity, as allowable by law. If you request that we withhold your 
name and/or address, state your request prominently at the beginning of 
your comment. However, we will not consider anonymous comments. We will 
make all submissions from organizations or businesses, and from 
individuals identifying themselves as representatives or officials of 
organizations or businesses, available for public inspection in their 
entirety.
    MMS Information Collection Clearance Officer: Arlene Bajusz (202) 
208-7744.

    Dated: October 13, 2005.
Lucy Querques Denett,
Associate Director for Minerals Revenue Management.
[FR Doc. 05-21283 Filed 10-24-05; 8:45 am]
BILLING CODE 4310-MR-P


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