This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

25177 

Vol. 74, No. 100 

Wednesday, May 27, 2009 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 301 

[REG–138326–07] 

RIN 1545–BH22 

Tax Avoidance Transactions; Hearing 

Cancellation 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Cancellation of notice of public 

hearing on proposed rulemaking. 

SUMMARY: This document cancels a 

public hearing on proposed rulemaking 

under section 6231 of the Internal 

Revenue Code that allows the IRS to 

convert partnership items to 

nonpartnership items when the 

application of the unified partnership 

audit and litigation procedures of 

sections 6221 through 6234 (TEFRA 

partnership procedures) with respect to 

certain tax avoidance transactions 

interferes with the effective and efficient 

enforcement of the internal revenue 

laws. 

DATES: The public hearing, originally 

scheduled for June 4, 2009, at 10 a.m., 

is cancelled. 

FOR FURTHER INFORMATION CONTACT: 

Richard A. Hurst of the Publications and 

Regulations Branch, Legal Processing 

Division, Associate Chief Counsel 

(Procedure and Administration), at 

Richard.A.Hurst@irscounsel.treas.gov. 

SUPPLEMENTARY INFORMATION: A notice 

of public hearing that appeared in the 

Federal Register on Friday, February 13, 

2009 (74 FR 7205), announced that a 

public hearing was scheduled for June 

4, 2009, at 10 a.m., in the auditorium, 

Internal Revenue Building, 1111 

Constitution Avenue, NW., Washington, 

DC. The subject of the public hearing is 

under section 6231 of the Internal 

Revenue Code. 

The public comment period for these 

regulations expired on May 14, 2009. 

Outlines of topics to be discussed at the 

hearing were due on May 15, 2009. The 

notice of proposed rulemaking and 

notice of public hearing instructed those 

interested in testifying at the public 

hearing to submit an outline of the 

topics to be addressed. As of 

Wednesday, May 20, 2009, no one has 

requested to speak. Therefore, the 

public hearing scheduled for June 4, 

2009, is cancelled. 

LaNita Van Dyke, 

Chief, Publications and Regulations Branch, 

Legal Processing Division, Associate Chief 

Counsel (Procedure and Administration). 

[FR Doc. E9–12167 Filed 5–26–09; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF THE INTERIOR 

Minerals Management Service 

30 CFR Parts 250, 256, and 260 

RIN 1010–AD06 

[Docket ID MMS–2007–OMM–0069] 

Leasing of Sulphur or Oil and Gas and 

Bonding Requirements in the Outer 

Continental Shelf 

AGENCY: Minerals Management Service 

(MMS), Interior. 

ACTION: Proposed rule. 

SUMMARY: The MMS proposes to update 

and streamline the existing Outer 

Continental Shelf leasing regulations, 

and to clarify implementation of the 

Federal Oil and Gas Royalty 

Simplification and Fairness Act of 1996. 

The rule would reorganize and reorder 

leasing requirements to reflect the 

leasing process more efficiently, as it 

has evolved over the last 26 years. The 

rule also proposes changes to parts 250 

and 260 that relate to the proposed 

revisions to part 256. 

DATES: Submit comments by September 

24, 2009. The MMS may not fully 

consider comments received after this 

date. Submit comments to the Office of 

Management and Budget on the 

information collection burden in this 

proposed rule by June 26, 2009. This 

does not affect the deadline for the 

public to comment to MMS on the 

proposed regulations. 

ADDRESSES: You may submit comments 

on the rulemaking by any of the 

following methods. Please use the 

Regulation Identifier Number (RIN) 

1010–AD06 as an identifier in your 

message. See also Public Availability of 

Comments under Procedural Matters. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Under the tab 

‘‘More Search Options,’’ click 

‘‘Advanced Docket Search,’’ then select 

‘‘Minerals Management Service’’ from 

the agency drop-down menu, then click 

the submit button. In the Docket ID 

column, select MMS–2007–OMM–0069 

to submit public comments and to view 

supporting and related materials 

available for this rulemaking. 

Information on using Regulations.gov, 

including instructions for accessing 

documents, submitting comments, and 

viewing the docket after the close of the 

comment period, is available through 

the site’s ‘‘User Tips’’ link. The MMS 

will post all comments. 

• Mail or hand-carry comments to the 

Department of the Interior; Minerals 

Management Service; Attention: 

Regulations and Standards Branch 

(RSB); 381 Elden Street, MS–4024, 

Herndon, Virginia 20170–4817. Please 

reference ‘‘Leasing of Sulphur or Oil 

and Gas and Bonding Requirements in 

the Outer Continental Shelf, 1010– 

AD06’’ in your comments and include 

your name and return address. 

• Send comments on the information 

collection in this proposed rule to: 

Interior Desk Officer 1010–AD06, Office 

of Management and Budget; 202–395– 

5806 (fax); e-mail: 

oira_docket@omb.eop.gov. Please also 

send a copy to MMS. 

FOR FURTHER INFORMATION CONTACT: For 

comments or questions on procedural 

issues, contact Kumkum Ray, 

Regulations and Standards Branch, at 

kumkum.ray@mms.gov, or at (703) 787– 

1604. For questions on technical issues, 

contact Jane Roberts, Leasing Division, 

at jane.roberts@mms.gov, or at (805) 

389–7836. 

SUPPLEMENTARY INFORMATION: This 

proposed rule completely rewrites the 

existing regulations at 30 CFR part 256, 

Leasing of Sulphur or Oil and Gas and 

Bonding Requirements in the Outer 

Continental Shelf (OCS). The major 

components of part 256 include: (1) The 

5-Year Leasing Program mandated by 

section 18 of the OCS Lands Act, 43 

U.S.C. 1344; (2) preparing for a lease 

sale; (3) issuing, maintaining, and 

ending a lease; and (4) bonding 

requirements. The MMS is proposing to 

reorganize and reorder the regulations 

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25178 Federal Register / Vol. 74, No. 100 / Wednesday, May 27, 2009 / Proposed Rules 

last rewritten in 1982 to reflect the 

leasing process more efficiently, as it 

has evolved over the past 26 years. This 

proposal would eliminate several 

sections of existing text as redundant or 

unnecessary. Redundant sections 

include subpart D, Joint Bidding, of 30 

CFR part 260. We do not intend these 

proposed changes to alter existing 

requirements concerning joint bidders. 

Some new sections would standardize 

or clarify practices that may not have 

been uniform in all three OCS regional 

offices. A new section (§ 256.621) on 

lease term pipelines was added using 

the language in 30 CFR part 250, subpart 

J, final rule at § 256.62(g). Other sections 

clarify processes required by legislation, 

enacted since these regulations were last 

rewritten, such as the Federal Oil and 

Gas Royalty Simplification and Fairness 

Act of 1996, concerning pro rata liability 

for monetary obligations; or by recently 

promulgated regulations, such as the 

Department of the Interior’s (DOI) nonprocurement debarment rules. There are 

also changes that will assist MMS in 

meeting its stewardship responsibilities 

and its role as a regulator. Other changes 

include: (1) Stating in the rule at 

§ 256.500(b) that for the purposes of an 

area-wide bond, ‘‘area-wide’’ refers to 

the limits of a planning area as defined 

and administered by MMS; and (2) 

information from lessees is now 

required to help assess bonding for 

decommissioning of OCS facilities and 

to assess other liabilities associated with 

decommissioning. 

The MMS published a final rule in the 

Federal Register on September 12, 2008 

(73 FR 52917), to implement section 

104(c) of the Gulf of Mexico Energy 

Security Act of 2006 (GOMESA), Public 

Law 109–432. It was designated subpart 

N, §§ 256.90 through 256.95. We have 

redesignated subpart N to subpart I, 

§§ 256.900 through 256.905. We have 

added GOMESA definitions for Bonus 

or royalty credit, Central planning area, 

Coastline, Desoto Canyon OPD, Destin 

Dome OPD, Eastern planning area, and 

Pensacola OPD. We have included a 

table in § 256.401 for ease in 

determining what evidence MMS 

requires to qualify a bidder and/or 

lessee from various entities, including 

several additional business 

organizational forms that now exist in 

the offshore industry. 

We propose to retain tables related to 

bonding for the same reason. The 

following derivation tables track the 

current regulations, section by section, 

to the proposed rule sections. Most of 

the proposed changes clarify regulatory 

language. The tables also list other 

reasons for changes. 

DERIVATION TABLE FOR 30 CFR PART 250—OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER CONTINENTAL

SHELF

Current regulations section Proposed rule section Nature of change 

250.1717(e) ................................... New requirement for submission of expense information on plugging 

and abandonment. 

250.1729(d) ................................... New requirement for submission of expense information on platform 

removal. 

250.1743(b)(8) ............................... New requirement for submission of expense information on site clearance. 

DERIVATION TABLE FOR 30 CFR PART 256—LEASING OF SULPHUR OR OIL AND GAS AND BONDING REQUIREMENTS IN

THE OUTER CONTINENTAL SHELF

Current regulations section Proposed rule section Nature of change 

Subpart A—Outer Continental Shelf 

Oil, Gas, and Sulphur Management, General.

Subpart A—General Provisions .... Redesignated. 

256.0 ............................................... 256.100(a) ..................................... Updated. 

256.101 .......................................... New section. 

256.1 ............................................... 256.102 .......................................... Simplified. 

256.2 ............................................... ........................................................ Eliminated as unnecessary to state policy from the Act. 

256.4 ............................................... ........................................................ Eliminated as redundant to the Act. 

256.5 ............................................... 256.103 .......................................... Eliminated unnecessary terms. 

256.7 ............................................... ........................................................ Eliminated as unnecessary, as any cross-references are included in 

the appropriate section. 

256.8 ............................................... 256.202 .......................................... Simplified language. 

256.10(a) ......................................... 256.100(b) ..................................... Simplified language. 

256.10(b) through (d) ...................... ........................................................ Eliminated as repetitive with 30 CFR part 252. 

256.11 ............................................. 256.630 .......................................... Simplified language and reorganized. 

256.12 ............................................. 256.206 .......................................... Simplified language. 

Subpart B—Oil and Gas Leasing 

Program.

Subpart B—Oil and Gas 5-Year 

Leasing Program.

Clarified name. 

256.16 ............................................. 256.200–202 .................................. Simplified language and reorganized. 

256.17 ............................................. 256.203–205 .................................. Simplified. 

256.19 ............................................. 256.201 .......................................... Simplified. 

256.20 ............................................. 256.202(c) ...................................... Simplified. 

Subpart C—Reports From Federal 

Agencies.

........................................................ Eliminated as repetitive with the Act. 

256.22.

Subpart D—Call for Information and 

Nominations.

Subpart C—Preparing for a Lease 

Sale.

Reorganized, see below. 

256.23 ............................................. 256.300 .......................................... Reorganized. 

256.25 ............................................. 256.302 .......................................... Simplified. 

Subpart E—Area Identification and 

Tract Size.

Subpart C—Preparing for a Lease 

Sale.

Reorganized in proposed subpart C. 

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Federal Register / Vol. 74, No. 100 / Wednesday, May 27, 2009 / Proposed Rules 25179 

DERIVATION TABLE FOR 30 CFR PART 256—LEASING OF SULPHUR OR OIL AND GAS AND BONDING REQUIREMENTS IN

THE OUTER CONTINENTAL SHELF—Continued 

Current regulations section Proposed rule section Nature of change 

256.26 ............................................. 256.301 .......................................... Reorganized. 

256.28 ............................................. 256.306 .......................................... Reorganized. 

Subpart F—Lease Sales ................. Subpart C—Preparing for a Lease 

Sale.

Reorganized in proposed subpart C. 

256.29 ............................................. 256.303 .......................................... Simplified. 

256.31 ............................................. 256.304, 305 .................................. Reorganized. 

256.32 ............................................. 256.306 .......................................... Simplified language. 

256.32(e) ......................................... ........................................................ Eliminated as relevant time period has passed. 

Subpart G—Issuance of Leases ..... Subpart D—Issuance of a Lease. Reorganized, see below. 

256.35 ............................................. 256.400 .......................................... Simplified language and reorganized. 

256.35(c) ......................................... 256.402(b), (c) ............................... Simplified language and reorganized. 

256.402(a), 403 ............................. New sections to require compliance with new government-wide/DOI 

non-procurement debarment rules covering principals. 

256.37(a), (b) ..................................

256.37(c) 

256.600,601 ...................................

256.602,603 

Simplified language, clarified terminology, and reorganized. The 5- 

year requirement codifies provision in Form MMS–2006 (12/87). 

256.38 ............................................. ........................................................ Eliminated as unnecessary section title. 

256.40 ............................................. ........................................................ Eliminated as redundant. Any definitions will be in § 256.103, Definitions. 

256.41 ............................................. 256.411,412 ................................... Simplified and eliminated unnecessary language, reorganized. 

256.41(d) ......................................... 256.414 .......................................... Simplified language. 

256.43 ............................................. 256.411–413 .................................. Simplified language and reorganized. 

256.43(a) ......................................... ........................................................ Eliminated unnecessary definitions. 

256.44 ............................................. 256.402 .......................................... Simplified language. 

256.46(a), (b) .................................. 256.410 .......................................... Simplified language. 

256.46(c) through (g) ...................... 256.401 .......................................... Simplified language, added detail for clarity, and included additional 

business organizational forms that exist offshore. 

256.46(h) ......................................... 256.402(b) ..................................... Simplified language. 

256.402(a), 403 ............................. New sections to require compliance with new government-wide/DOI 

non-procurement debarment rules covering transactions at tier 

below principals. 

256.404 .......................................... New section with timeframe for notification of certain business 

changes to keep lease records accurate and up-to-date. 

256.47 ............................................. 256.411(c), (d); 416; 420 ............... Simplified language and eliminated some as unnecessary. 

256.47(c) ......................................... 256.416(c) ...................................... Simplified language and added two options with respect to high bids, 

if tied. 

256.47(e)(1), (e)(3) .......................... 256.417 .......................................... Simplified language and reorganized delegation of authority from the 

Secretary to the Director for reconsideration of rejected bids. 

256.47(f) .......................................... 256.420(b) ..................................... Clarified that deferred bonuses must be paid within 5 years per 43 

U.S.C. 1337(a)(2). 

256.47(g) ......................................... 256.420(c) ...................................... Clarified that successful bidder may be held liable for full bid amount 

under certain circumstances. 

256.49 ............................................. 256.420 .......................................... Discussion of form for other minerals eliminated as redundant within 

30 CFR part 281. 

256.50 ............................................. 256.421 .......................................... Simplified. 

Subpart H—Rentals and Royalties 

[Reserved].

........................................................ Eliminated as unnecessary as never used. 

Subpart I—Bonding ......................... Subpart E—Financial Accountability and Risk Management.Reorganized, see below. 

256.52 ............................................. 256.500 .......................................... The MMS may adjust the amount of general bonds in the future by 

using the Implicit Price Deflator for Gross Domestic Product. 

256.52(e) ......................................... 256.521 .......................................... Changed period for providing additional bond coverage from 6 

months to 45 days. 

256.52(f), (g) ................................... 256.502 .......................................... Requires 115 percent of bond value if using Treasury securities to 

meet new value fluctuation requirements from Treasury Department. 

256.53 ............................................. 256.501 .......................................... Clarified minimum level of bond for specific activity. 

256.53(d) ......................................... 256.510 .......................................... Separated provisions concerning supplemental bond from those concerning bond level changes due to leave activity. New provision to 

allow MMS to require demonstration of bond sufficiency. 

256.54 ............................................. 256.503 .......................................... Specified that the bond guarantees all non-monetary lease obligations. 

256.503(b) ..................................... New section to retain right to require electronic filing of bonds after 

90-day notice. 

256.504 .......................................... New section clarifies whose non-monetary lease obligations must be 

covered. 

256.505 .......................................... New section clarifies lessee/operator bond. 

256.55 ............................................. 256.520 .......................................... Simplified. 

256.56 ............................................. 256.512 .......................................... Simplified. 

256.57 ............................................. 256.511 .......................................... Clarified language and eliminated imprecise use of term, indemnity. 

256.58 ............................................. 256.522 .......................................... Clarified and separated termination of period of liability and cancellation of a bond. 

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25180 Federal Register / Vol. 74, No. 100 / Wednesday, May 27, 2009 / Proposed Rules 

DERIVATION TABLE FOR 30 CFR PART 256—LEASING OF SULPHUR OR OIL AND GAS AND BONDING REQUIREMENTS IN

THE OUTER CONTINENTAL SHELF—Continued 

Current regulations section Proposed rule section Nature of change 

256.523.

256.59 ............................................. 256.524, 525 .................................. Reorganized. 

256.59(e) and (g) ............................ 256.526.

Subpart J—Assignments, Transfers, and Extension.Subpart F—Maintaining a Lease ... Reorganized, see below. 

256.605 .......................................... New section to clarify obligations of record title owners. 

256.606 .......................................... New section to clarify obligations of operating rights owners. 

256.610 .......................................... New section to iterate statutory requirement for approval prior to sale, 

exchange, assignment or transfer of a lease. 

256.62(a) ......................................... 256.611 .......................................... Simplified language and clarified that can disapprove assignment if 

assignor and/or assignee has unsatisfied obligations. 

256.62(b) ......................................... 256.412 .......................................... Included in section on joint bidding. 

256.62(c) ......................................... 256.617 .......................................... Simplified language. 

256.62(d) ......................................... 256.616 .......................................... Simplified language. 

256.62(e) ......................................... 256.618 .......................................... Simplified language. 

256.62(f) .......................................... 256.616 .......................................... Simplified language. 

256.62(g) ......................................... 256.621 .......................................... New section on lease term pipelines. 

256.63 ............................................. 256.104 .......................................... Redesignated in Subpart A. 

256.64, 256.68 ................................ 256.613 .......................................... Reorganized and clarified. 

256.64(a) ......................................... 256.612 .......................................... Clarified that subleases restricted to 2-depth levels. 

256.64(a)(7) ..................................... 256.620(a).

256.64(a)(8) ..................................... 256.620(b).

256.64(e) through (h) ...................... 256.614.

256.64(i) .......................................... 256.619.

256.65 ............................................. 256.612(b) ..................................... Reorganized and clarified. 

256.67 ............................................. 256.614 .......................................... Reorganized and clarified. 

256.68 ............................................. 256.613(a) ..................................... Reorganized and clarified 

256.70 ............................................. 256.601(a) ..................................... Reorganized and clarified. 

256.71 ............................................. 256.601(b) ..................................... Reorganized and clarified. 

256.72 ............................................. 256.601(c) ...................................... Reorganized and clarified. 

256.601(d) ..................................... New section to clarify effect of production from a unitized lease. 

256.73 ............................................. 256.601(a) ..................................... Reorganized and clarified. 

Subpart K—Termination of Leases Subpart G—Ending a Lease ......... Reorganized, see below 

256.700 .......................................... New section to clarify what happens if you do not take certain actions 

to maintain a lease. 

256.76 ............................................. 256.701 .......................................... Simplified. 

256.77 ............................................. 256.702 .......................................... Simplified. 

Subpart L—Section 6 Leases ......... ........................................................ Eliminated as unnecessary repetition of 43 U.S.C. 1335(b). Leases of 

other minerals covered in 30 CFR part 281. 

256.79, 256.80 

Subpart M—Studies ........................ ........................................................ Eliminated as unnecessary recitation of internal procedures. 

256.82 

Subpart H [RESERVED].

Subpart N—Bonus or Royalty Credits for Exchange of Certain 

Leases.

Subpart I—Bonus or Royalty Credits for Exchange of Certain 

Leases.

Redesignated. 

256.90—256.95 ............................... 256.900—256.905.

Appendix A to part 256—Oil and 

Gas Cash Bonus Bid.

........................................................ Eliminated as unnecessary repetition of bid form. 

DERIVATION TABLE FOR 30 CFR PART 260—OUTER CONTINENTAL SHELF OIL AND GAS LEASING, SUBPART D 

Current regulations section Proposed rule section Nature of change 

Part 260—Outer Continental Shelf 

Leasing, Subpart D—Joint Bidding. 

260.301–303 

256.411 .......................................... Removed subpart D from part 260. Proposed § 256.411 simplified 

language and eliminated duplicative provisions of current 

§§ 256.38–256.44. 

Procedural Matters: Regulatory 

Planning and Review (Executive Order 

(E.O.) 12866) 

This proposed rule is not a significant 

rule as determined by the Office of 

Management and Budget (OMB) and is 

not subject to review under E.O. 12866. 

This proposed rule primarily rewrites 

existing regulations that govern the 

offshore Federal leasing process for 

sulphur and oil and gas subject to the 

exclusive jurisdiction of the United 

States. The rule is rewritten in simple, 

clear language, and reorganized to 

reflect the steps in the leasing process 

as they have evolved. Minor changes are 

proposed to make certain practices 

uniform among the three OCS regional 

offices. 

(1) This proposed rule would not have 

an effect of $100 million or more on the 

economy. It would not adversely affect 

in a material way the economy, 

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Federal Register / Vol. 74, No. 100 / Wednesday, May 27, 2009 / Proposed Rules 25181 

productivity, competition, jobs, the 

environment, public health or safety, or 

State, local, or tribal governments or 

communities. The proposed rule would 

rewrite 30 CFR part 256 in plain 

language, and would contain virtually 

the same reporting and recordkeeping 

requirements and attendant costs as the 

current regulations. A cost-benefit and 

economic analysis is not required. 

(2) This proposed rule would not 

create a serious inconsistency or 

otherwise interfere with an action taken 

or planned by another agency. 

(3) This proposed rule would not alter 

the budgetary effects of entitlements, 

grants, user fees, or loan programs or the 

rights or obligations of their recipients. 

Nominal user fees are not material in 

size or nature. The rule proposes a new 

fee for recording certain secondary lease 

interests, $27; continues existing fees for 

submitting non-required documents, 

$27; and for requesting an approval of 

the assignments or transfers of certain 

lease interests, $186. 

(4) This proposed rule would not raise 

novel legal or policy issues. The rule 

largely rewrites existing regulations. 

Regulatory Flexibility Act 

The Department of the Interior 

certifies that this proposed rule would 

not have a significant economic effect 

on a substantial number of small entities 

under the Regulatory Flexibility Act (5 

U.S.C. 601 et seq.). 

This proposed rule would affect 

lessees and potential lessees, of which 

there are approximately 130 different 

companies. These companies are 

generally classified under the North 

American Industry Classification 

System (NAICS) Code 211111, which 

includes companies that extract crude 

petroleum and natural gas. For this 

NAICS code classification, a small 

company is one with fewer than 500 

employees. The MMS estimates that of 

the 130 lessees and operators that 

explore for and produce oil and gas on 

the OCS, approximately 90 are small 

businesses (70 percent). 

The primary economic effect of this 

rule on small businesses would be the 

cost associated with information 

collection (IC) activities. The rule 

proposes to rewrite 30 CFR part 256 and 

would add three new requirements for 

30 CFR part 250, subpart Q. The 

proposed rule contains virtually the 

same burden hour requirements and 

non-hour cost burdens as the current 

regulations. The changes in reporting 

requirements would not significantly 

increase the IC burden on respondents— 

large or small. The MMS estimates an 

annual increase of 2,396 hours in the 

paperwork burden from that imposed by 

the current regulations. There would 

also be one new $27 non-hour cost 

burden for recording certain secondary 

lease interests resulting in an annual 

increase of $18,900 ($27 × an estimated 

700 filings). A Regulatory Flexibility 

Analysis is not required. Accordingly, a 

Small Entity Compliance Guide is not 

required. 

Your comments are important. The 

Small Business and Agriculture 

Regulatory Enforcement Ombudsman 

and 10 Regional Fairness Boards were 

established to receive comments from 

small businesses about Federal agency 

enforcement actions. The Ombudsman 

will annually evaluate the enforcement 

activities and rate each agency’s 

responsiveness to small business. If you 

wish to comment on the actions of 

MMS, call 1–888–734–3247. You may 

comment to the Small Business 

Administration without fear of 

retaliation. Allegations of 

discrimination/retaliation filed with the 

Small Business Administration will be 

investigated for appropriate action. 

Small Business Regulatory Enforcement 

Fairness Act 

The proposed rule is not a major rule 

under 5 U.S.C. 804(2) the Small 

Business Regulatory Enforcement 

Fairness Act. This proposed rule: 

a. Would not have an annual effect on 

the economy of $100 million or more. 

b. Would not cause a major increase 

in costs or prices for consumers, 

individual industries, Federal, State, or 

local government agencies, or 

geographic regions. 

c. Would not have significant adverse 

effects on competition, employment, 

investment, productivity, innovation, or 

the ability of U.S.-based enterprises to 

compete with foreign-based enterprises. 

Unfunded Mandates Reform Act 

This proposed rule would not impose 

an unfunded mandate on State, local, or 

tribal governments or the private sector 

of more than $100 million per year. The 

proposed rule would not have a 

significant or unique effect on State, 

local, or tribal governments or the 

private sector. A statement containing 

the information required by Unfunded 

Mandates Reform Act (2 U.S.C. 1531 et 

seq.) is not required. 

Takings Implication Assessment (E.O. 

12630) 

Under the criteria in E.O. 12630, this 

proposed rule does not have significant 

takings implications. The proposed rule 

is not a governmental action capable of 

interference with constitutionally 

protected property rights. A Takings 

Implication Assessment is not required. 

Federalism (E.O. 13132) 

Under the criteria in E.O. 13132, this 

proposed rule does not have sufficient 

Federalism implications to warrant the 

preparation of a Federalism Assessment. 

This proposed rule would not 

substantially and directly affect the 

relationship between the Federal and 

State governments. To the extent that 

State and local governments have a role 

in OCS activities, this proposed rule 

would not affect that role. A Federalism 

Assessment is not required. 

Civil Justice Reform (E.O. 12988) 

This rule complies with the 

requirements of E.O. 12988. 

Specifically, this rule: 

(a) Meets the criteria of section 3(a) 

requiring that all regulations be 

reviewed to eliminate errors and 

ambiguity and be written to minimize 

litigation; and 

(b) Meets the criteria of section 3(b)(2) 

requiring that all regulations be written 

in clear language and contain clear legal 

standards. 

Consultation With Indian Tribes (E.O. 

13175) 

Under the criteria in E.O. 13175, we 

have evaluated this proposed rule and 

determined that it has no potential 

effects on Federally recognized Indian 

tribes. There are no Indian or tribal 

lands in the OCS. 

Paperwork Reduction Act (PRA) of 

1995 

The proposed rule contains a 

collection of information that is being 

submitted to OMB for review and 

approval under 44 U.S.C. 3501 et seq. 

As part of our continuing effort to 

reduce paperwork and respondent 

burdens, MMS invites the public and 

other Federal agencies to comment on 

any aspect of the reporting and 

recordkeeping burden. If you wish to 

comment on the Information Collection 

(IC) aspects of revised 30 CFR parts 250 

and 256, you may send your comments 

directly to OMB (see the ADDRESSES

section of this notice). Please identify 

your comments with Docket ID: MMS– 

2007–OMM–0069 in the subject line. 

Send a copy of your comments to the 

Regulations and Standards Branch 

(RSB), Attn: Comments; 381 Elden 

Street, MS–4024; Herndon, Virginia 

20170–4817. You may obtain a copy of 

the supporting statement for the IC by 

contacting the Bureau’s Information 

Collection Clearance Officer at (202) 

208–7744. 

The PRA provides that an agency may 

not conduct or sponsor, and a person is 

not required to respond to, an IC unless 

it displays a currently valid OMB 

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25182 Federal Register / Vol. 74, No. 100 / Wednesday, May 27, 2009 / Proposed Rules 

control number. The OMB is required to 

make a decision concerning the IC 

contained in these proposed regulations 

between 30 to 60 days after publication 

of this document in the Federal 

Register. Therefore, a comment to OMB 

is best assured of having its full effect 

if OMB received it by June 26, 2009. 

This does not affect the deadline for the 

public to comment to MMS on the 

proposed regulations. 

The title of the IC for this proposed 

rule is 30 CFR Part 256, Leasing of 

Sulphur or Oil and Gas and Bonding 

Requirements in the Outer Continental 

Shelf, 30 CFR Part 250, Subpart Q, and 

30 CFR Part 260, Outer Continental 

Shelf Oil and Gas Leasing. The MMS 

estimates there are approximately 130 

respondents (Federal oil and gas or 

sulphur lessees and/or operators). 

Responses to this IC are required to 

obtain or retain a benefit and are 

mandatory. The frequency of response 

varies, but is primarily on occasion. The 

IC does not include questions of a 

sensitive nature. The MMS will protect 

proprietary information according to 

section 26 of the OCS Lands Act; 30 

CFR 256.100(b) of the proposed 

regulation; the Freedom of Information 

Act (5 U.S.C. 552), its implementing 

regulations at 43 CFR part 2; and 30 CFR 

250.197, Data and information to be 

made available to the public or for 

limited inspection. 

This IC is a total rewrite of 30 CFR 

part 256, Leasing of Sulphur or Oil and 

Gas and Bonding Requirements in the 

Outer Continental Shelf and adds three 

new requirements to 30 CFR part 250, 

subpart Q, Decommissioning. 

The IC required by the current 30 CFR 

part 250, subpart Q, Decommissioning, 

is approved under OMB Control 

Number 1010–0142. There are three 

new proposed requirements that affect 

subpart Q, for a total of 820 burden 

hours. The MMS will use the 

information collected for these proposed 

requirements to help MMS assess the 

abandonment liability for each lease. 

This abandonment liability will be used 

to set supplemental bond requirements 

for each operator, and these 

supplemental bonds are used to protect 

the Federal Government against defaults 

should an operator go into bankruptcy. 

When final regulations are promulgated, 

the IC burdens for the 30 CFR part 250, 

subpart Q requirements will be 

incorporated into its respective IC for 

that regulation (1010–0142, 17,991 

burden hours, expiration 11/30/10). 

The IC required by the current 30 CFR 

part 256 regulations is approved under 

OMB Control Number 1010–0006. There 

are several new requirements that will 

impose an additional 1,576 burden 

hours and $18,900 in non-hour cost 

burdens to the already approved hours 

under 1010–0006 (17,103 burden hours, 

$603,125 non-hour cost burdens, 

expiration 5/31/2010). The MMS will 

use the information collected under 30 

CFR part 256 to determine if applicants 

are qualified to hold leases in the OCS. 

Specifically, MMS uses the information 

to: 

• Verify the qualifications of a bidder 

on an OCS lease sale. Once the required 

information is filed with MMS, a 

qualification number is assigned to the 

bidder so that duplicate information is 

not required on subsequent filings. 

• Develop the semiannual List of 

Restricted Joint Bidders. This identifies 

parties ineligible to bid jointly with 

each other on OCS lease sales, under 

limitations established by the Energy 

Policy and Conservation Act of 1975. 

• Ensure the qualification of 

assignees and track operators on 

leaseholds. Once a lease is awarded, the 

transfer of a lessee’s interest to another 

qualified party must be approved by an 

MMS regional director, regional 

supervisor, or regional manager (Pacific 

Region only). Also, a lessee may 

designate an operator to act on the 

lessee’s behalf. This designation must be 

approved by MMS before the designated 

operator may begin operations. 

• Document that a leasehold or 

geographical subdivision has been 

surrendered by the record title holder. 

• Keep track of who owns which 

lease term pipeline since they are not 

currently documented on submitted 

information. Also, during the 

decommissioning process, if operators 

have changed since the beginning of the 

lease—decommissioning operations are 

worked between the companies. But, 

after all decommissioning activities are 

complete, if a safety hazard still 

remains, then MMS will need to know 

that the responsibility for compliance 

lies with the original operator. 

• Update the corporate database that 

is used to determine what leases are 

available for a lease sale and the 

ownership of all OCS leases. Nonproprietary information is also publicly 

available from the MMS corporate 

database via the Internet. 

The MMS also uses various forms 

relating to this subpart. The forms allow 

lessees to submit the required 

information in a standardized format 

that helps MMS process the data in a 

more timely and efficient manner. There 

are five forms associated with this IC, 

MMS–150, MMS–151, MMS–152, 

MMS–2028, and MMS–2028A. The first 

three forms are used for assignment 

purposes and the last two forms are 

used to hold the surety liable for the 

obligations and liability of the 

principal/lessee or operator. 

The proposed rule imposes changes to 

the existing IC hour burdens. These 

changes are: 

• Submit expense information on 

plugging and abandonment (+520 

hours). 

• Submit expense information on 

platform removal (+150 hours). 

• Submit expense information on site 

clearance (+150 hours). 

• Notify MMS if you or your 

principals are excluded, disqualified, or 

convicted of a crime—Federal nonprocurement debarment; request 

exception (+75 hours). 

• Provide acceptable bond for 

payment of a deferred bonus (+1⁄4 hour). 

• Submit statement excluding 

payment obligations of co-lessee or 

designated operator (+1 hour). 

• Submit report to MMS listing 

remaining lease term pipelines, 

including decommissioned pipelines on 

lease and indicate which pipelines 

remain as lease term (+1,500 hours). 

When the rule becomes effective, the 

new collection will replace the current 

one for 30 CFR part 256. 

On August 25, 2008 (73 FR 49943), we 

also updated cost recovery fees. 

Therefore, non-hour cost burdens have 

increased by $55,450. 

We estimate the total combined (30 

CFR parts 250 and 256) annual burden 

and non-hour cost burdens for this 

proposed rule to be 19,499 burden hours 

and $677,475 non-hour cost burdens. 

Therefore, the rule adds a net 2,396 

burden hours and $18,900 non-hour 

cost burdens to the already approved IC 

burdens. Except for the items identified 

as NEW in the following chart, the 

burden estimates shown are those that 

are estimated for the current 30 CFR 

part 256 regulations. The public has had 

numerous opportunities to comment on 

the current estimates during the process 

to renew the OMB approval of the IC 

requirements in current regulations. 

The following table details the IC 

burden for the proposed rulemaking 

requirements. 

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Federal Register / Vol. 74, No. 100 / Wednesday, May 27, 2009 / Proposed Rules 25183 

30 CFR part 250, subpart Q Reporting and recordkeeping requirements Hour burden Average number of 

annual responses 

Annual burden 

hours 

NEW 250.1717(e) ....................... NEW Submit expense information on plugging 

and abandonment.

1 .................. 520 responses ............... 520 

NEW 250.1729(d) ....................... NEW Submit expense information on platform 

removal.

1 .................. 150 responses ............... 150 

NEW 250.1743(b)(8) ................... NEW Submit expense information on site 

clearance.

1 .................. 150 responses ............... 150 

Total ..................................... ............................................................................ ..................... 820 responses ............... 820 

Citation 30 CFR part 256 * Reporting and recordkeeping requirements Hour burden Average number of 

annual responses 

Annual burden 

hours 

Non-Hour Cost Burdens 

Subparts A and B 

Subpart A 256.104 ...................... Service Fees ..................................................... Fees covered individually throughout 

subpart. 

0 

Subpart B: 201; 202; 203; 204 ... Submit nominations, suggestions, and relevant 

information in response to request for comments on proposed 5-year leasing program, 

including information from States & local 

governments/industry/Federal agencies and 

others.

4 .................. 1 response ..................... 4 

Subtotal ................................ ............................................................................ ..................... 1 response ..................... 4 

Subpart C 

300 .............................................. Submit response to Calls for Information and 

Nominations on areas proposed for leasing 

in the 5-year program, including information 

from States/local governments.

4 .................. 1 response ..................... 4 

304(a) .......................................... States or local governments submit comments/ 

recommendations on size, timing, or location 

of proposed lease sale.

4 .................. 10 responses ................. 40 

Subtotal ................................ ............................................................................ ..................... 11 responses ................. 44 

Subpart D 

400; 401 ...................................... Establish company file for qualification; submit 

qualifications for lessee/bidder.

2 .................. 104 responses ............... 208 

NEW 402(a); 403 ........................ NEW Notify MMS if you or your principals are 

excluded, disqualified, or convicted of a 

crime—Federal non-procurement debarment 

and suspension system; request exception.

1.5 ............... 50 ................................... 75 

404 .............................................. Notify MMS of all mergers, name changes, or 

change of business.

Requirement not considered IC under 5 

CFR 1320.3(h)(1) 

0 

410 .............................................. Submit bids and required information ............... 5 .................. 2,000 bids ...................... 10,000 

410(d); 417 .................................. Request reconsideration of bid decision ........... Requirement not considered IC under 5 

CFR 1320.3(h)(9). 

0 

411(a)(2); 412 ............................. File statement or detailed report of production 2 .................. 100 responses ............... 200 

411(b) .......................................... Submit appeal due to restricted joint bidders 

list.

Requirement not considered IC under 5 

CFR 1320.3(h)(9). 

0 

414 .............................................. Request exemption from bidding restrictions; 

submit appropriate information.

Requirement not considered IC under 5 

CFR 1320.3(h)(9). 

0 

416(c) .......................................... Notify MMS of tie bid decision; file agreement 

to accept joint lease on tie bids.

3.5 ............... 2 agreements ................ 7 

420; 421 ...................................... Execute lease (includes submission of evidence of authorized agent and request for 

dating of leases); submit supporting data.

1 .................. 852 leases ..................... 852 

NEW 420(b) ................................ NEW Provide acceptable bond for payment of 

a deferred bonus. We do not expect this to 

occur, hence minimal burden.

15 mins. ...... 1 response ..................... 15 mins. 

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25184 Federal Register / Vol. 74, No. 100 / Wednesday, May 27, 2009 / Proposed Rules 

Citation 30 CFR part 256 * Reporting and recordkeeping requirements Hour burden Average number of 

annual responses 

Annual burden 

hours 

Subtotal ................................ ............................................................................ ..................... 3,109 responses ............ 11,342 (rounded) hours 

Subpart E 

500(a); 501; 503; ......................... Submit OCS Mineral Lessee’s and Operator’s 

Bond (Form MMS–2028), required information, and surety notifications.

.25 ............... 124 forms ...................... 31 

501; 505; 510 .............................. Demonstrate financial worth/ability to carry out 

present and future financial obligations, request approval of another form of security, 

or request reduction in amount of supplemental bond required.

3.5 ............... 165 submissions ............ 578 (rounded) 

502 .............................................. Provide U.S. Treasury securities or other types 

of security instruments, including authority 

for MMS to sell securities, relevant information, and related or subsequent actions.

2 .................. 10 submissions .............. 20 

NEW 504 ..................................... NEW Submit statement excluding payment obligations of co-lessee(s) or designated operator(s).1 .................. 1 exclusion statement ... 1 

510 .............................................. Submit OCS Mineral Lessee’s and Operator’s 

Supplemental Plugging and Abandonment 

Bond (Form MMS–2028A) w/required information; upon request, demonstrate sufficiency; request reduction.

.25 ............... 136 forms ...................... 34 

511 .............................................. Provide third-party indemnity; financial information/statements; additional bond info; executed guarantor agreement and supporting 

information/documentation.

19 ................ 45 submissions .............. 855 

511(c)(6); 522(b); 523 ................. Notify MMS and others, and request MMS approval to terminate period of liability or cancel bond or other form of security.

1⁄2 ................ 378 requests .................. 189 

511(d); 520; 521; 522(b); 

523(a)(2);.

Furnish replacement bond or provide alternate form of security. Burden included above 

with bond or alternate forms of security 

0 

512 .............................................. Request approval to withdraw funds from RUE/ 

ROW decommissioning account.

12 ................ 1 abandonment account 12 

520 .............................................. Notify MMS and others of bond lapse or action 

filed alleging lessee, surety, or guarantor is 

insolvent or bankrupt.

1 .................. 3 notices ........................ 3 

525(b) .......................................... Provide information to demonstrate lease will 

be brought into compliance.

16 ................ 5 responses ................... 80 

Subtotal ................................ ............................................................................ ..................... 868 responses ............... 1,803 

Subpart F 

Subparts E and F: 501; 601; 603 Request approval for various operations or submit plans or applications. Burden included 

with other approved collections for 30 CFR Part 250 (1010–0114/subpart A, 1010– 

0151/subpart B, 1010–0141/subpart D, 1010–0142/subpart Q, and 1010–0149/subpart 

I) 

0 

Subpart F: 610; 611; 613(a); 

614; 615; 617; 619.

File application and required information for 

assignment of record title interest (Form 

MMS–150) (includes sell, exchange, transfer); specify effective date.

1 hour .......... 2,063 forms ................... 2,063 

$186 fee × 2,063 forms = $383,718 

611; 612; 613(a); 614; 615; 617; 

619.

File application and required information for 

assignment of operating interest (Form 

MMS–151) (includes sell, exchange, transfer); specify effective date.

1 hour .......... 937 forms ...................... 937 

$186 fee × 937 forms = $174,282 

620(a) .......................................... File required instruments creating or transferring working interests, etc., for record purposes.1 hour .......... 700 filings ...................... 700 

NEW FEE .................................................................................................................... NEW $27 fee × 700 filings = $18,900 

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Federal Register / Vol. 74, No. 100 / Wednesday, May 27, 2009 / Proposed Rules 25185 

Citation 30 CFR part 256 * Reporting and recordkeeping requirements Hour burden Average number of 

annual responses 

Annual burden 

hours 

620(b) .......................................... Submit ‘‘non-required’’ documents, for record 

purposes that respondents want MMS to file 

with the lease document.

Accepted on behalf of lessees as a 

service, MMS doesn’t require/need. 

0 

$27 fee × 3,725 filings = $100,575 

NEW 256.621 .............................. NEW After assignment of lease or new designation of operator, submit report to MMS 

listing remaining Lease Term P/Ls, including 

decommissioned P/Ls, on lease; indicate 

which P/Ls remain as Lease Term P/Ls.

1 .................. 1,500 L/T P/L listing reports.1,500 

Subtotal ................................ ............................................................................ ..................... 5,200 responses ............ 5,200 

$677,475 non-hour cost burdens 

Subpart G 

701; 902(a)(5) ............................. File Form MMS–152 to request relinquishment 

of lease.

1 .................. 240 relinquishment 

forms.

240 

702 .............................................. Comment on lease cancellation (MMS expects 

1 in 10 years).

1 .................. 1 submission ................. 1 

Subtotal ................................ ............................................................................ ..................... 241 responses ............... 241 

Subpart I 

902(a) .......................................... Request a bonus or royalty credit and submit 

supporting documentation.

1 .................. 30 ................................... 30 

905 .............................................. Request approval to transfer bonus or credit to 

another party with supporting information.

1 .................. 15 ................................... 15 

Subtotal ................................ ............................................................................ ..................... 45 responses ................. 45 

Total Burdens ....................... ............................................................................ ..................... 10,295 Responses ........ 19,499 

$677,475 Non-Hour Cost Burdens 

*A few sections in 30 CFR part 260 also contain references to IC requirements in 30 CFR part 256 that are detailed in this table. 

The MMS specifically solicits 

comments on the following questions: 

(1) Is the IC useful and necessary for 

MMS to perform its functions properly? 

(2) Are the estimates of the burden 

hours of the IC reasonable? 

(3) Do you have any suggestions that 

would enhance the quality, clarity, or 

usefulness of the information to be 

collected? 

(4) Is there a way to minimize the IC 

burden on those who respond, 

including the use of appropriate 

automated electronic, mechanical, or 

other forms of information technology? 

In addition, the PRA requires agencies 

to estimate the total annual reporting 

and recordkeeping non-hour cost 

burden resulting from the IC. With the 

exception of the two currently approved 

service fees—record title and/or 

operating rights (transfer), and nonrequired document filing fees—MMS 

has identified one new non-hour cost 

burden for $27, filing required 

instruments creating or transferring 

working interests (see the burden table). 

This fee would only be a requirement if 

respondents want to submit documents 

for record purposes to file with the lease 

document. We consider this a service to 

the respondent. We have identified no 

other non-hour paperwork cost burdens 

and we solicit your comments on this 

item. For reporting and recordkeeping 

only, your response should split the cost 

estimate into two components: (a) Total 

capital and start-up 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 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 start-up 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 IC; (3) for reasons 

other than to provide information or 

keep records for the Government; or (4) 

as part of customary and usual business 

or private practices. 

National Environmental Policy Act 

This rule does not constitute a major 

Federal action significantly affecting the 

quality of the human environment. The 

MMS has analyzed this proposed rule 

under the criteria of the National 

Environmental Policy Act and 516 

Departmental Manual 15. This proposed 

rule meets the criteria set forth in 516 

Departmental Manual 2 (Appendix 1.10) 

for a Departmental ‘‘Categorical 

Exclusion’’ in that this proposed rule is 

‘‘* * * of an administrative, financial, 

legal, technical, or procedural nature 

and whose environmental effects are too 

broad, speculative, or conjectural to 

lend themselves to meaningful analysis 

* * *.’’ This proposed rule also meets 

the criteria set forth in 516 

Departmental Manual 15.4(C)(1) for an 

MMS ‘‘Categorical Exclusion’’ in that its 

impacts are limited to administration, 

economic or technological effects. 

Further, the MMS has analyzed this 

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25186 Federal Register / Vol. 74, No. 100 / Wednesday, May 27, 2009 / Proposed Rules 

proposed rule to determine if it meets 

any of the extraordinary circumstances 

that would require an environmental 

assessment or an environmental impact 

statement as set forth in 516 

Departmental Manual 2.3, and 

Appendix 2. The MMS concluded that 

this rule does not meet any of the 

criteria for extraordinary circumstances 

as set forth in 516 Departmental Manual 

2 (Appendix 2). 

Data Quality Act 

In developing this proposed rule, we 

did not conduct or use a study, 

experiment, or survey requiring peer 

review under the Data Quality Act (Pub. 

L. 106–554, app. C § 515, 114 Stat. 2763, 

2763A–153–154). 

Effects on the Energy Supply (E.O. 

13211) 

This rule is not a significant energy 

action under the definition in E.O. 

13211. A Statement of Energy Effects is 

not required. 

Clarity of This Regulation 

We are required by E.O. 12866, E.O. 

12988, and by the Presidential 

Memorandum of June 1, 1998, to write 

all rules in plain language. This means 

that each rule we publish must: 

(a) Be logically organized; 

(b) Use the active voice to address 

readers directly; 

(c) Use clear language rather than 

jargon; 

(d) Be divided into short sections and 

sentences; and 

(e) Use lists and tables wherever 

possible. 

If you feel that we have not met these 

requirements, send us comments by one 

of the methods listed in the ADDRESSES

section. To better help us revise the 

rule, your comments should be as 

specific as possible. For example, you 

should tell us the numbers of the 

sections or paragraphs that you find 

unclear, which sections or sentences are 

too long, the sections where you feel 

lists or tables would be useful, etc. 

Public Availability of Comments 

Before including your address, phone 

number, e-mail address, or other 

personal identifying information in your 

comment, you should be aware that 

your entire comment—including your 

personal identifying information—may 

be made publicly available at any time. 

While you can ask us in your comment 

to withhold your personal identifying 

information from public review, we 

cannot guarantee that we will be able to 

do so. 

List of Subjects 

30 CFR Part 250 

Administrative practice and 

procedure, Continental shelf, 

Environmental impact statements, 

Environmental protection, Pipelines, 

Public lands—mineral resources, Public 

lands—rights-of-way, Reporting and 

recordkeeping requirements. 

30 CFR Part 256 

Administrative practice and 

procedure, Continental shelf, 

Environmental protection, Government 

contracts, Intergovernmental relations, 

Oil and gas exploration, Public lands— 

mineral resources, Public lands—rightsof-way, Reporting and recordkeeping 

requirements, Surety bonds. 

30 CFR Part 260 

Continental shelf, Government 

contracts, Mineral royalties, Oil and gas 

exploration, Public lands—mineral 

resources, Reporting and recordkeeping 

requirements. 

Dated: May 11, 2009. 

Ned Farquhar, 

Acting Assistant Secretary—Land and 

Minerals Management. 

For the reasons stated in the 

preamble, MMS proposes to amend 30 

CFR parts 250, 256, and 260 as follows: 

PART 250—OIL AND GAS AND 

SULPHUR OPERATIONS IN THE 

OUTER CONTINENTAL SHELF 

1. The authority citation for part 250 

continues to read as follows: 

Authority: 31 U.S.C. 9701, 43 U.S.C. 1334. 

2. Amend § 250.1717 by: 

(A) Revising paragraphs (c) and (d), 

and 

(B) Adding paragraph (e) to read as 

follows: 

§ 250.1717 After I permanently plug a well, 

what information must I submit? 

* * * * * 

(c) Nature and quantities of material 

used in the plugs; 

(d) If you cut and pull away any 

casing string, you must submit: 

(1) A description of the methods used, 

including information on explosives 

used; 

(2) Size and amount of casing 

removed; and 

(3) Casing removed depth. 

(e) Expenses of plugging and 

abandonment with supporting 

documentation. 

3. Amend § 250.1729 by: 

(A) Revising paragraphs (b) and (c), 

and 

(B) Adding paragraph (d) to read as 

follows: 

§ 250.1729 After I remove a platform or 

other facility, what information must I 

submit? 

* * * * * 

(b) A description of any mitigation 

measures you took; 

(c) A statement signed by your 

authorized representative that certifies 

that the types and amount of explosives 

you used in removing the platform or 

other facility were consistent with those 

set forth in the approved removal 

application; and 

(d) Expenses of removal of the 

platform or other approved 

decommissioning of the platform with 

supporting documentation. 

3. Amend § 250.1743 by: 

(A) Revising paragraphs (b)(6) and 

(b)(7), and 

(B) Adding paragraph (b)(8) to read as 

follows: 

§ 250.1743 How do I certify that a site is 

clear of obstructions? 

* * * * * 

(b) * * * 

(6) The results of the survey, 

including a list of any debris removed 

or a statement from the trawling 

contractor that no objects were 

recovered; 

(7) A post-trawling job plot or map 

showing the trawled area; and 

(8) Expenses of site clearance with 

supporting documentation. 

4. Revise part 256 to read as follows: 

PART 256—LEASING OF SULPHUR OR 

OIL AND GAS AND BONDING 

REQUIREMENTS IN THE OUTER 

CONTINENTAL SHELF 

Subpart A—General Provisions 

Sec. 

256.100 Information collection and 

proprietary information. 

256.101 What are the consequences if I 

provide false information? 

256.102 What does this part cover? 

256.103 Definitions. 

256.104 Service fees. 

Subpart B—Oil and Gas 5-Year Leasing 

Program 

256.200 What is the 5-year program? 

256.201 Does MMS consult with interested 

parties while preparing the 5-year 

program? 

256.202 How does MMS start the 5-year 

program preparation process? 

256.203 What does MMS do before 

publishing a proposed program? 

256.204 How do Governments and citizens 

comment on the proposed program? 

256.205 What does MMS do before 

approving a final program or a 

significant revision? 

256.206 Does MMS offer blocks in a sale 

that is not on the 5-year program 

schedule? 

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Federal Register / Vol. 74, No. 100 / Wednesday, May 27, 2009 / Proposed Rules 25187 

Subpart C—Preparing for a Lease Sale 

256.300 What is a call for information? 

256.301 What does MMS do with the 

information from the call? 

256.302 What does MMS do if identified 

areas are within 3 miles of the seaward 

boundary of a coastal State? 

256.303 What happens with an approved 

proposed notice of sale? 

256.304 What role do affected States have? 

256.305 What does MMS do with 

comments and recommendations 

received on the proposed notice? 

256.306 How does MMS conduct a lease 

sale? 

Subpart D—Issuance of a Lease 

Qualifications 

256.400 Who may become a lessee? 

256.401 How do I show that I am qualified 

to be a lessee? 

256.402 Who may not become a lessee or 

acquire an interest in a lease? 

256.403 What do the non-procurement 

debarment rules require that I do? 

256.404 When must I notify MMS of 

mergers, name changes, or changes of 

business form? 

How To Bid 

256.410 How do I submit a bid? 

Restrictions on Joint Bidding 

256.411 Are there restrictions on bidding 

with others and do they affect my ability 

to bid? 

256.412 When must I file a statement of 

production? 

256.413 How do I determine my production 

for purposes of the restricted joint 

bidders list? 

256.414 Are exemptions from the bidding 

restrictions possible? 

How Does MMS Act on Bids? 

256.416 What does MMS do with my bid? 

256.417 What may I do if my bid is 

rejected? 

Awarding the Lease 

256.420 What happens if I am the 

successful high bidder? 

256.421 When is my lease effective? 

Subpart E—Financial Accountability and 

Risk Management 

General Bonds 

256.500 What security must I provide when 

I obtain my lease? 

256.501 Do my general bonding 

requirements change as activities 

progress on my lease? 

256.502 What instruments other than a 

surety bond may I use to provide the 

required security? 

256.503 What general requirements must 

my bond or other security meet? 

256.504 Must my surety bond cover the 

payment obligations of my co-lessees 

and designated operators? 

256.505 What happens if my co-lessees or 

designated operators exclude my 

payment obligations from their bond? 

Supplemental Bonds 

256.510 Can MMS require that I post a 

supplemental bond? 

256.511 May I use a third-party guaranty to 

meet the supplemental bonding 

requirement? 

256.512 May I use a lease, right-of-way 

(ROW), or right-of-use and easement 

(RUE)-specific decommissioning account 

to meet the supplemental bonding 

requirement? 

Changes in Bonding or Security 

256.520 What do I do if my bond lapses? 

256.521 What happens if the value of my 

bond or other security is reduced? 

256.522 What happens if my surety wants 

to terminate the period of liability of my 

bond? 

256.523 What happens if my surety wants 

to cancel my bond? 

256.524 Why might MMS call for forfeiture 

of my bond? 

256.525 How will I know about this 

forfeiture? 

256.526 What if correcting my default 

requires a change in the amount of my 

bond? 

Subpart F—Maintaining a Lease 

Initial Period of a Lease 

256.600 What is the initial period of my oil 

and gas lease? 

256.601 How may I maintain my oil and gas 

lease beyond the initial period? 

256.602 What is the initial period of my 

sulphur lease? 

256.603. How may I maintain my sulphur 

lease beyond the initial period? 

Lease Obligations 

256.605 What are my obligations as a record 

title holder? 

256.606 What are my rights and obligations 

as an operating rights owner? 

Transferring Interest in All or Part of a 

Lease 

256.610 May I sell, exchange, assign, or 

otherwise transfer my lease? 

256.611 May I assign all or part of my lease 

interest? 

256.612 May I assign operating rights? 

256.613 How do I seek approval of an 

assignment? 

256.614 How do I transfer the interest of a 

deceased leaseholder? 

256.615 What if I want to assign interests in 

more than one lease at the same time? 

256.616 What is the effect of an assignment 

on an assignor’s liability? 

256.617 May I specify an effective date of 

the assignment? 

256.618 What is the effect of an assignment 

on an assignee’s liability? 

256.619 As a restricted joint bidder, may I 

assign interest to another restricted joint 

bidder? 

256.620 Are there any interests I may assign 

without MMS approval? 

256.621 What reports must I submit for 

lease term pipelines when MMS 

approves a lease assignment? 

Helium 

256.630 What must a lessee do if MMS 

elects to extract helium from a lease? 

Subpart G—Ending a Lease 

256.700 How does a lease end? 

256.701 May I end the lease myself? 

256.702 Will MMS end my lease? 

Subpart H—[Reserved] 

Subpart I—Bonus or Royalty Credits for 

Exchange of Certain Leases 

256.900 Which leases may I exchange for a 

bonus or royalty credit? 

256.901 How much bonus or royalty credit 

will MMS grant in exchange for a lease? 

256.902 What must I do to obtain a bonus 

or royalty credit? 

256.903 How is the bonus or royalty credit 

allocated among multiple lease owners? 

256.904 How may I use the bonus or royalty 

credit? 

256.905 How do I transfer a bonus or 

royalty credit to another person? 

Authority: 31 U.S.C. 9701, 42 U.S.C. 6213, 

43 U.S.C. 1334, Pub. L. 109–432. 

Subpart A—General Provisions 

§ 256.100 Information collection and 

proprietary information. 

(a) Information collection (IC). (1) The 

Office of Management and Budget 

(OMB) approved the collection of 

information under 44 U.S.C. 3501 et 

seq., and assigned OMB Control Number 

1010–xxxx. The title of this IC is 30 CFR 

part 256, Leasing of Sulphur or Oil and 

Gas and Bonding Requirements in the 

Outer Continental Shelf and 30 CFR part 

260, Outer Continental Shelf Oil and 

Gas Leasing. The MMS collects the 

information to determine if applicants 

seeking to obtain a lease on the Outer 

Continental Shelf (OCS) are qualified to 

hold such a lease and can meet the 

monetary and non-monetary 

requirements of a lease. Responses to 

this collection are required to obtain or 

retain a benefit or are mandatory under 

43 U.S.C. 1331 et seq. The MMS will 

protect proprietary information 

collected according to section 26 of the 

OCS Lands Act (OCSLA), 43 U.S.C. 

1352, and this section. 

(2) The Paperwork Reduction Act of 

1995 requires us to inform the public 

that an agency may not conduct or 

sponsor, and you are not required to 

respond to, a collection of information 

unless it displays a currently valid OMB 

control number. 

(3) Send comments regarding any 

aspect of the collection of information 

under this part, including suggestions 

for reducing the burden, to the IC 

Clearance Officer, Minerals 

Management Service, Mail Stop 5438, 

1849 C Street, NW., Washington, DC 

20240. 

(b) Proprietary information. Specific 

indications of interest in an area by 

industry received in response to a Call 

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for Information issued by the Secretary 

is proprietary information. 

(1) The MMS will handle requests for 

indications of interest in an area and 

any other proprietary or privileged 

information you submit, according to 

the regulations in 43 CFR part 2. 

(2) Upon request, MMS will provide 

relative summary indications of interest 

in areas to a Call for Information for a 

proposed sale. 

§ 256.101 What are the consequences if I 

provide false information? 

Under 18 U.S.C. 1001, it is a crime to 

knowingly and willfully make any false, 

fictitious, or fraudulent statements or 

representations to any U.S. 

governmental entity regarding any 

matter within its jurisdiction. 

§ 256.102 What does this part cover? 

These regulations establish the 

procedures the Secretary of the Interior 

and MMS will use to administer a 

leasing program for minerals on the 

submerged lands of the OCS, under the 

OCSLA, 43 U.S.C. 1331 et seq. 

§ 256.103 Definitions. 

As used in this part, the term: 

Act means the OCS Lands Act as 

amended (43 U.S.C. 1331 et seq.). 

Affected State means, with respect to 

any program, plan, lease sale, or other 

activity, proposed, conducted, or 

approved pursuant to the provisions of 

the Act, any State: 

(1) The laws of which are, pursuant to 

section 4(a)(2) of the Act, 43 U.S.C. 

1333(a)(2), to be the law of the United 

States for the portion of the OCS on 

which such activity is, or is proposed to 

be, conducted; 

(2) Which is, or is proposed to be, 

directly connected by transportation 

facilities to any artificial island or 

structure referred to in section 4(a)(1) of 

the Act, 43 U.S.C. 1333(a)(1); 

(3) Which is receiving, or in 

accordance with the proposed activity 

will receive, oil for processing, refining, 

or transshipment which was extracted 

from the OCS and transported directly 

to such State by means of vessels or by 

a combination of means including 

vessels; 

(4) Which is designated by the 

Secretary of the Interior as a State in 

which there is a substantial probability 

of significant impact on or damage to 

the coastal, marine, or human 

environment; or a State in which there 

will be significant changes in the social, 

governmental, or economic 

infrastructure, resulting from the 

exploration, development, and 

production of oil and gas anywhere on 

the OCS; or 

(5) In which the Secretary of the 

Interior finds that because of such 

activity, there is, or would be, a 

significant risk of serious damage to the 

marine or coastal environment in the 

event of any oil spill, blowout, or 

release of oil or gas from vessels, 

pipelines, or other transshipment 

facilities due to factors such as 

prevailing winds and currents. 

Bidding Unit means portions of two or 

more blocks combined for bidding 

purposes that may be bid upon as a 

single administrative unit and will 

become a single lease. The term tract, as 

defined in this section, may also be 

used. 

Bonus or royalty credit means a legal 

instrument or other written 

documentation, or an entry in an 

account managed by the Secretary that 

a bidder or lessee may use in lieu of any 

other monetary payment for— 

(1) A bonus due for a lease on the 

OCS; or 

(2) A royalty due on oil or gas 

production from any lease located in the 

Gulf of Mexico. 

Central planning area means the 

Central Gulf of Mexico Planning Area of 

the OCS, as designated in the document 

entitled, ‘‘Draft Proposed Program Outer 

Continental Shelf Oil and Gas Leasing 

Program 2007–2012,’’ dated February 

2006. 

Coastal environment means the 

physical, atmospheric, and biological 

components, conditions, and factors 

that interactively determine the state, 

condition, and quality of the terrestrial 

ecosystem from the shoreline inward to 

the boundaries of the coastal zone. 

Coastal zone means the coastal waters 

(including the lands therein and 

thereunder) and the adjacent shorelands 

(including the water therein and 

thereunder), strongly influenced by each 

other and in proximity to the shorelines 

of several coastal States, and includes 

islands, transition and intertidal areas, 

salt marshes, wetlands, and beaches, 

whose zone extends seaward to the 

outer limit of the U.S. territorial sea and 

extends inland from the shore lines to 

the extent necessary to control 

shorelands; the uses of which have a 

direct and significant impact on the 

coastal waters, and the inward 

boundaries of which may be identified 

by several coastal States, under section 

305(b)(1) of the Coastal Zone 

Management Act (CZMA) of 1972, 16 

U.S.C. 1454(b)(1). 

Coastline means the line of ordinary 

low water along that portion of the coast 

in direct contact with the open sea and 

the line marking the seaward limit of 

inland waters. 

Desoto Canyon OPD means the 

official protraction diagram designated 

as Desoto Canyon which has a western 

edge located at the universal transverse 

mercator (UTM) X coordinate 1,346,400 

in the North American Datum of 1927 

(NAD 27). 

Destin Dome OPD means the official 

protraction diagram designated as 

Destin Dome which has a western edge 

located at the universal transverse 

mercator (UTM) X coordinate 1,393,920 

in the NAD 27. 

Director means the Director of MMS 

of the U.S. Department of the Interior, 

or an official authorized to act on the 

Director’s behalf. 

Eastern planning area means the 

Eastern Gulf of Mexico Planning Area of 

the OCS, as designated in the document 

entitled ‘‘Draft Proposed Program Outer 

Continental Shelf Oil and Gas Leasing 

Program 2007–2012,’’ dated February 

2006. 

General bond means a bond with the 

amount fixed by regulations. The 

amount of the bond required is 

determined by the level of activity on 

the lease, right-of-way, or right-of-use 

and easement. 

Human environment means the 

physical, social, and economic 

components, conditions, and factors 

that interactively determine the state, 

condition, and quality of living 

conditions, employment, and health of 

those affected, directly or indirectly, by 

activities occurring on the OCS. 

Marine environment means the 

physical, atmospheric, and biological 

components, conditions, and factors 

which interactively determine the 

productivity, state, conditions, and 

quality of the marine ecosystem, 

including the waters of the high seas, 

the contiguous zone, transitional and 

intertidal areas, salt marshes, and 

wetlands within the coastal zone and on 

the OCS. 

Mineral means oil, gas, and sulphur; 

it also includes sand, gravel, and salt 

used to facilitate the development and 

production of oil, gas, or sulphur. 

OCS means the Outer Continental 

Shelf, as that term is defined in section 

2(a) of the Act, 43 U.S.C. 1331(a). 

Pensacola OPD means the official 

protraction diagram designated as 

Pensacola which has a western edge 

located at the universal transverse 

mercator (UTM) X coordinate 1,393,920 

in the NAD 27. 

Person means, in addition to a natural 

person, an association, a State, a 

political subdivision of a State, or a 

private, public, or municipal 

corporation. 

Secretary means the Secretary of the 

Interior or a designated employee. 

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Supplemental bond means a bond 

required by MMS based upon potential 

lease decommissioning liabilities and/or 

other lease obligations that exceed the 

general bond. 

Tract means an area of the OCS that 

is offered for sale as a single lease. The 

area may be a whole block, a portion of 

a block, or combined portions from 

multiple blocks. The term bidding unit, 

as defined previously, may also be used. 

We, us, and our means the Minerals 

Management Service (MMS) of the 

Department of the Interior. 

You means a lessee, the holder or 

owner of operating rights, a designated 

operator or agent of the lessee(s), a right 

of use and easement holder, State or 

Federal, and a pipeline right-of-way 

holder. 

§ 256.104 Service fees. 

(a) The table in this paragraph shows 

the fees that you must pay to MMS for 

the services listed. The fees will be 

adjusted periodically according to the 

Implicit Price Deflator for Gross 

Domestic Product by publication of a 

document in the Federal Register. If a 

significant adjustment is needed to 

arrive at the new actual cost for any 

reason other than inflation, then a 

proposed rule containing the new fees 

will be published in the Federal 

Register for comment. 

SERVICE FEE TABLE

Service—processing of the following: Fee amount 30 CFR 

citation 

(1) Assignment of record title or operating rights (transfer) for MMS approval ...................................................... $186 § 256.613 

(2) Required document filing for record purpose, but not for MMS approval ......................................................... 27 § 256.620(a) 

(3) Non-required document filing for record purposes ............................................................................................ 27 § 256.620(b) 

(b) Payment of the fees listed in 

paragraph (a) of this section must 

accompany the submission of the 

document for approval or filing, or be 

sent to an office identified by the 

Regional Director. Once a fee is paid, it 

is nonrefundable, even if your service 

request is withdrawn. If your request is 

returned to you as incomplete, you are 

not required to submit a new fee with 

the amended submission. 

Subpart B—Oil and Gas 5-Year 

Leasing Program 

§ 256.200 What is the 5-year program? 

Section 18(a) of the Act, 43 U.S.C. 

1344(a), requires the Secretary to 

prepare an oil and gas leasing program 

that consists of a 5-year schedule of 

proposed lease sales to best meet 

national energy needs, showing the size, 

timing, and location of leasing activity 

as precisely as possible. The MMS 

prepares the schedule to obtain the 

proper balance between the potential for 

environmental damage, the potential for 

discovery of oil and gas, and the 

potential for adverse impact on the 

coastal zone. 

§ 256.201 Does MMS consult with 

interested parties while preparing the 5-year 

program? 

In preparing the 5-year program, MMS 

will consult with States and local 

governments, industry, and any other 

interested parties, primarily through 

public notice and comment procedures, 

as described in the sections that follow. 

§ 256.202 How does MMS start the 5-year 

program preparation process? 

To begin preparation of the 5-year 

leasing program, MMS invites and 

considers nominations for any areas to 

be included or excluded from leasing, 

by doing the following: 

(a) The MMS prepares and makes 

public, official protraction diagrams and 

leasing maps of OCS areas. Any area 

properly included on the official 5-year 

diagrams and maps may be offered for 

lease for any mineral not already leased. 

(b) The MMS invites and considers 

any other suggestions and relevant 

information from Governors of affected 

States, local Governments, industry, 

Federal agencies, and other interested 

parties, through a publication of a 

request for information in the Federal 

Register. Local Governments must first 

submit their comments to their State 

Governor, before sending them to MMS. 

(c) The MMS sends letters to the 

Governor of each affected State asking 

them to identify specific laws, goals, 

and policies that we should consider. 

We ask each State Governor as well as 

the Department of Commerce to identify 

the relationship between any oil and gas 

activity and the State coastal zone 

management program under sections 

305 and 306 of the CZMA, 16 U.S.C. 

1454 and 1455. The MMS will consider 

the coastal zone management program 

being developed or administered by an 

affected State under the CZMA. 

(d) The MMS asks the Department of 

Energy for information on regional and 

national energy markets, OCS 

production goals, and transportation 

networks. 

§ 256.203 What does MMS do before 

publishing a proposed program? 

After considering the solicited 

comments and information described in 

§ 256.202, we prepare a proposed 

leasing program. 

(a) At least 60 days before publication 

of a proposed program, we send a draft 

of the proposed program to the 

Governor of each affected State, who 

may solicit comments from local 

Governments that may be affected by 

the proposed program. 

(b) The MMS replies in writing to any 

comment from a Governor that is 

received at least 15 days before 

submission of the proposed program to 

Congress and its publication for 

comment in the Federal Register. 

§ 256.204 How do Governments and 

citizens comment on the proposed 

program? 

The MMS publishes the proposed 

program in the Federal Register for 

comment by the public. At the same 

time, we send the proposed program to 

the Governors of the affected States and 

to Congress and the Attorney General 

for review and comment. 

(a) Governors are responsible for 

providing a copy of the proposed 

program to affected local Governments 

in their State. Local Governments may 

comment directly to us, but must also 

send their comments to the Governor of 

their State. 

(b) All comments from any party are 

due within 90 days after publication in 

the Federal Register. 

§ 256.205 What does MMS do before 

approving a final program or a significant 

revision? 

At least 60 days before approval, we 

submit a proposed final program or 

significant revision to the President and 

Congress. The MMS also submits any 

comments received and explains the 

reasons why we did not accept any 

specific recommendation of the 

Attorney General, or of a State or local 

Government. 

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§ 256.206 Does MMS offer blocks in a sale 

that is not on the 5-year program schedule? 

(a) The MMS may offer blocks within 

a planning area included in the 5-year 

program in an otherwise unscheduled 

sale, if the block either: 

(1) Received a bid that was rejected in 

an earlier sale; 

(2) Had a high bid that was forfeited 

in a scheduled sale; or 

(3) Is a development block subject to 

drainage. 

(b) For an unscheduled sale, we may 

disclose the classification of the block as 

a development block. However, blocks 

in the Central or Western Gulf of Mexico 

(GOM) planning areas cannot be offered 

in a sale that is not on the schedule. 

Subpart C—Preparing for a Lease Sale 

§ 256.300 What is a call for information? 

The MMS issues a call for information 

on areas proposed for leasing in the 5- 

year program, through publication in 

the Federal Register and other 

publications as desired. A call may 

include more than one proposed sale. 

We request comments on: 

(a) Industry interest in the areas 

proposed for leasing; 

(b) Geological conditions, including 

bottom hazards; 

(c) Archaeological sites on the seabed 

or near shore; 

(d) Multiple uses of the proposed 

leasing area including navigation, 

recreation, and fisheries; 

(e) Other socioeconomic, biological, 

and environmental information; and 

(f) Industry’s nominations or 

indications of interest in specific blocks 

within areas proposed for leasing in the 

5-year program for each sale. 

§ 256.301 What does MMS do with the 

information from the call? 

In consultation with appropriate 

Federal agencies, we develop a proposal 

to recommend areas to the Secretary for 

further consideration for leasing and 

environmental analysis. 

(a) The MMS considers all available 

environmental information, conflicts 

with other uses, resource potential, 

industry interest, and other relevant 

information, including comments 

received from State and local 

Governments and other interested 

parties in response to the call. 

(b) The MMS evaluates the area 

identified for further consideration for 

the potential effects of leasing on the 

human, marine, and coastal 

environments, and to develop measures 

to mitigate adverse impacts for all the 

options to be analyzed. We inform the 

public of any additions or deletions 

from the area proposed for leasing in the 

5-year program that result from the call 

process. 

(c) The MMS prepares appropriate 

documentation under the National 

Environmental Policy Act (NEPA). 

§ 256.302 What does MMS do if identified 

areas are within 3 miles of the seaward 

boundary of a coastal State? 

For areas proposed for leasing that are 

within 3 geographical miles seaward of 

the seaward boundary of a coastal State, 

as defined in and governed by section 

1337(g)(2) of the Act, we provide the 

Governor of the coastal State, pursuant 

to the confidentiality requirements in 

part 251 of this chapter, the following: 

(a) A schedule for leasing; 

(b) All geographical, geological, and 

ecological characteristics of the areas 

proposed for leasing; 

(c) An estimate of the oil and gas 

resources; and 

(d) An identification of any field, 

geological structure, or trap that lies 

within 3 miles of the State’s seaward 

boundary. 

§ 256.303 What happens with an approved 

proposed notice of sale? 

The MMS sends an approved 

proposed notice of sale to the Governors 

of affected States and publishes the 

notice of its availability in the Federal 

Register. The notice includes 

appropriate stipulations and conditions 

to mitigate potential adverse impacts on 

the environment, the Director’s findings, 

and all comments and recommendations 

received on the proposal. 

§ 256.304 What role do affected States 

have? 

(a) Within 60 days after receiving the 

proposed notice of sale, Governors of 

affected States may submit comments 

and recommendations to MMS 

regarding the size, timing, and location 

of the proposed sale. Local Governments 

may comment to us directly, but must 

also send their comments to the 

Governor of their State. 

(b) The MMS will provide a 

consistency determination to affected 

States that will indicate whether the 

proposed sale is consistent, to the 

maximum extent practicable, with the 

enforceable policies of the applicable 

coastal zone management programs. 

§ 256.305 What does MMS do with 

comments and recommendations received 

on the proposed notice? 

The MMS considers all comments and 

recommendations received in response 

to the proposed notice of sale. We 

accept comments and recommendations 

from States and local Governments if we 

determine, after providing opportunity 

for consultation, that they provide for a 

reasonable balance between the national 

interest and the well being of the 

citizens of the State or locality. We send 

to each Governor written reasons for 

rejecting or adopting alternatives on 

how to address that Governor’s 

recommendations. 

§ 256.306 How does MMS conduct a lease 

sale? 

(a) The MMS publishes a final notice 

of sale in the Federal Register and in 

other publications, as appropriate, at 

least 30 days before the date of the sale. 

The notice: 

(1) States the place, time, and method 

for filing bids and the place, date, and 

hour for opening bids; and 

(2) Contains or references a 

description of the area offered for lease 

and any stipulations, terms, and 

conditions of the sale. 

(b) Tracts are offered for lease by 

competitive sealed bid in accordance 

with the terms and conditions in the 

final notice of sale and applicable laws 

and regulations. Tracts comprise an area 

not exceeding 5,760 acres, unless we 

find that a larger area is necessary for 

reasonable economic production. 

Subpart D—Issuance of a Lease 

Qualifications 

§ 256.400 Who may become a lessee? 

You may become a lessee if you are: 

(a) A citizen or national of the U.S.; 

(b) An alien lawfully admitted for 

permanent residence in the U.S., as 

defined in 8 U.S.C. 1101(a)(20); 

(c) A private, public, or municipal 

corporation organized under the laws of 

any State of the U.S., the District of 

Columbia, or any territory or insular 

possession subject to U.S. jurisdiction; 

(d) An association of such citizens, 

nationals, resident aliens, or 

corporations; 

(e) A State; or 

(f) A political subdivision of States. 

§ 256.401 How do I show that I am 

qualified to be a lessee? 

(a) Provide your MMS qualification 

number if you have qualified with us, in 

which case you will not need to provide 

the information in paragraph (b) or (c) 

of this section, unless we require it. 

(b) An individual must submit a 

written statement of citizenship status 

attesting to U.S. citizenship. It need not 

be notarized nor give the age of the 

individual. A resident alien must 

submit an original or a photocopy of the 

Immigration and Naturalization Service 

form evidencing legal status of the 

resident alien. 

(c) A corporation, association, or other 

entity must submit evidence (refer to the 

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table in paragraph (d) of this section) 

acceptable to MMS that: 

(1) It is qualified to hold mineral 

leases under this subpart; 

(2) It is authorized to conduct 

business under the laws of its State; 

(3) It is authorized to hold mineral 

leases in the OCS under the operating 

rules of its business; and 

(4) The persons holding the titles 

listed are authorized to bind the 

corporation or association when 

conducting business with us. 

(d) Acceptable evidence under 

paragraph (c) of this section includes, 

but is not limited to: 

Requirements to qualify as a lessee to hold leases in the OCS: Corp. Ltd. prtnsp. Gen. prtnsp. LLC Trust 

(1) Certified statement by Secretary, over corporate seal, certifying that 

the corporation is authorized to hold OCS leases ............................... XX .................... .................... .................... ....................

(2) Evidence of authority of titled positions to bind corporation, certified 

by Secretary, over corporate seal, including the following: ................. XX .................... .................... .................... ....................

(i) Certified copy of resolution of the board of directors with titles 

of officers authorized to bind corporation. 

(ii) Certified copy of resolutions granting corporate officer authority 

to issue a power of attorney. 

(iii) Certified copy of power of attorney or certified copy of resolution granting power of attorney. 

(3) Certificate of partnership or organization paperwork registering with 

the appropriate State official ................................................................ .................... XX XX XX ....................

(4) Copy of articles of partnership or organization evidencing filing with 

appropriate Secretary of State, certified by Secretary of partnership 

or is a member or manager of a LLC .................................................. .................... XX XX XX ....................

(5) Certificate evidencing State where partnership or LLC is registered. 

Statement of authority to hold OCS leases, certified by Secretary 

OR original paperwork registering with the appropriate State official .................... XX XX XX ....................

(6) Statements from each partner or LLC member indicating the following: .................................................................................................. .................... XX XX XX ....................

(i) If a corporation or partnership, statement of State of organization and authorization to hold OCS leases, certified by Secretary 

over corporate seal, if a corporation. 

(ii) If an individual, a statement of citizenship. 

(7) Statement from general partner, certified by Secretary that: ............ .................... XX .................... .................... ....................

(i) Each individual limited partner is a U.S. citizen and; 

(ii) Each corporate limited partner or other entity is incorporated or 

formed and organized under the laws of a U.S. State or territory. 

(8) Evidence of authority to bind partnership or LLC, if not specified in 

partnership agreement, articles of organization, or LLC regulations, 

i.e., certificates of authority from Secretary reflecting authority of officers ....................................................................................................... .................... XX XX XX ....................

(9) Listing of members of LLC certified by Secretary or any member or 

manager of LLC ................................................................................... .................... .................... .................... XX ....................

(10) Copy of trust agreement or document establishing the trust and all 

amendments, properly certified by the trustee with reference to 

where the original documents are filed ................................................ .................... .................... .................... .................... XX 

(11) Statement indicating the law under which the trust is established 

and that the trust is authorized to hold OCS leases ........................... .................... .................... .................... .................... XX 

§ 256.402 Who may not become a lessee 

or acquire an interest in a lease? 

You may not become a lessee or 

acquire an interest in a lease if: 

(a) You or your principals are 

excluded or disqualified from 

participating in transactions covered by 

the Federal non-procurement debarment 

and suspension system (2 CFR parts 180 

and 1400), unless MMS explicitly has 

approved an exception for this 

transaction; 

(b) You or your principals fail to meet 

or exercise due diligence under section 

8(d) of the Act, 43 U.S.C. 1337(d) on any 

other OCS lease; or 

(c) The MMS determines after notice 

and opportunity for a hearing under 30 

CFR part 290, subpart A, that your 

operating performance is unacceptable 

under 30 CFR part 250 on any other 

OCS lease. 

§ 256.403 What do the non-procurement 

debarment rules require that I do? 

You must comply with the 

Department of the Interior’s nonprocurement debarment regulations at 2 

CFR parts 180 and 1400. 

(a) You must notify MMS if you know 

that you or your principals are 

excluded, disqualified, or convicted of 

crime as described in 2 CFR part 180 

subpart I. You must make this 

notification before you sign a lease, 

assignment of record title interest, or 

transfer (assignment) of operating rights 

interest; or become a lease or unit 

operator. This paragraph does not apply 

if you have previously provided a 

statement disclosing this information, 

and we have received an exception from 

the Department of the Interior as 

described in 2 CFR 180.135. 

(b) If you wish to enter into a covered 

transaction with another person at the 

next lower tier, you must first: 

(1) Verify that the person is not 

excluded or disqualified under the 

requirements in 2 CFR part 180; and 

(2) Require the person to: 

(i) Comply with this subpart; and 

(ii) Include the obligation to comply 

with this subpart in their contracts and 

other transactions. 

(c) After you enter into a covered 

transaction, you must immediately 

notify MMS in writing if you learn that: 

(1) You failed to disclose information 

earlier; or 

(2) Due to changed circumstances, 

you or your principals now meet any of 

the criteria in 2 CFR 180.800. 

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§ 256.404 When must I notify MMS of 

mergers, name changes, or changes of 

business form? 

You must immediately notify us of 

any merger, name change, or change of 

business form. The latest you may make 

this notification is 1 year after the 

earliest effective date or the date of 

filing the change or action with the 

Secretary of the State or other 

authorized official in the State of 

original registry. 

How to Bid 

§ 256.410 How do I submit a bid? 

(a) You must submit a separate sealed 

bid for each tract or bidding unit to the 

address provided and by the time 

specified in the notice of sale. You may 

not bid on less than an entire tract or 

bidding unit. 

(b) You must include a deposit to 

cover all bids submitted. The notice of 

sale specifies the amount and method of 

payment. 

(c) You may not submit a bid on an 

OCS lease if, after notice and hearing 

under 30 CFR part 290, the Secretary 

finds that you are not meeting the 

diligence requirements on any other 

OCS lease. 

(d) If your high bid is rejected, then 

the decision of the authorized officer on 

bids must be the final decision of the 

Department, subject only to 

reconsideration by the Secretary, upon 

your written request as set out in 

§ 256.417. 

Restrictions on Joint Bidding 

§ 256.411 Are there restrictions on bidding 

with others and do they affect my ability to 

bid? 

The Energy Policy and Conservation 

Act of 1975, 42 U.S.C. 6213, prohibits 

joint bidding by major oil and gas 

producers under the following 

circumstances: 

(a) The MMS publishes a restricted 

joint bidders list twice yearly in the 

Federal Register. Persons appearing on 

this list are limited in their ability to 

submit joint bids (see paragraph (c) of 

this section). The list: 

(1) Consists of the persons chargeable 

with an average worldwide daily 

production in excess of 1.6 million 

barrels of crude oil, liquefied petroleum 

products, or the Btu equivalent in 

natural gas, for the prior production 

period; and 

(2) Is based upon the statement of 

production that you must file as 

required by § 256.412. 

(b) If we place you on the restricted 

joint bidders list, we will send you a 

copy of the order placing you on the list. 

You may appeal this order to the 

Interior Board of Land Appeals under 30 

CFR part 290, subpart A. 

(c) If you are listed in the Federal 

Register in any group of restricted 

bidders, you may not bid: 

(1) Jointly with another person in any 

other group of restricted bidders for the 

applicable 6-month bidding period; or 

(2) Separately during the 6-month 

bidding period if you have an agreement 

with another restricted bidder that 

would result in joint ownership in an 

OCS lease. 

(d) As a bidder, you are prohibited 

from unlawful combination with, or 

intimidation of, bidders under 18 U.S.C. 

1860. 

§ 256.412 When must I file a statement of 

production? 

(a) You must file a statement of 

production if you had an average 

worldwide daily production of over 1.6 

million barrels for the prior production 

period (determine your production 

using the method in § 256.413). Your 

statement must specify that you were 

chargeable with an average daily 

production in excess of 1.6 million 

barrels for the prior production period. 

(b) The prior production periods are 

as follows: 

For the bidding period of . . . 

The prior production period is the preceding 

. . . 

(1) May through 

October, 

July through December. 

(2) November 

through April, 

January through June. 

(c) You must file the statement of 

production by the following deadlines: 

For the bidding period of . . . You must file the statement by . . . 

(1) May through 

October, 

March 17. 

(2) November 

through April, 

September 17. 

(d) If you file a statement of 

production, MMS may require you to 

submit a detailed report of production. 

(1) The detailed report must list crude 

oil, liquefied petroleum products, or Btu 

equivalent in natural gas chargeable for 

the prior production period. 

(2) You must submit this report 

within 30 days after receiving the MMS 

request. 

(3) The MMS may inspect and copy 

such documents, records of production, 

analyses, and other material to verify 

the accuracy of any earlier statements of 

production. 

(e) If you submit a statement of 

production that misrepresents your 

chargeable production, we may cancel 

any of your leases that were awarded in 

reliance upon such statement. 

§ 256.413 How do I determine my 

production for purposes of the restricted 

joint bidders list? 

(a) To determine the amount of 

production chargeable to you, add 

together: 

(1) Your average daily production in 

barrels of crude oil, liquefied petroleum 

products, or the Btu equivalent in 

natural gas worldwide; and 

(2) Your proportionate share of the 

average daily production owned by any 

entity which has an interest in you as 

the reporting person, and in which you 

have an interest. 

(b) For the purpose of this section, 

average daily production includes 

production owned by: 

(1) You; 

(2) Every subsidiary of yours; 

(3) Every person of which you are a 

subsidiary; and 

(4) Every subsidiary of any person of 

which you are a subsidiary. 

(c) For purposes of this section, 

interest means at least 5 percent 

ownership or control of you or the 

reporting person and includes any 

interest: 

(1) From ownership of securities or 

other evidence of ownership; or 

(2) By participation in any contract, 

agreement, or understanding regarding 

control of the person or their production 

of crude oil, liquefied petroleum 

products, or the Btu equivalent in 

natural gas. 

(d) For purposes of this section, entity 

means a person that meets both of the 

following criteria: 

(1) The entity is, in addition to a 

natural person, a corporation, 

partnership, association, joint-stock 

company, trust, fund, or any receiver, 

trustee in bankruptcy, or similar official 

acting for such a company; and 

(2) Fifty (50) percent or more of the 

entity’s stock or other interest having 

power to vote for the election of a 

controlling body, such as directors or 

trustees, is directly or indirectly owned, 

controlled, or held with the power to 

vote by another person. 

§ 256.414 Are exemptions from the bidding 

restrictions possible? 

The MMS may exempt you from the 

bidding restrictions if, after an 

opportunity for a hearing, we find that 

extremely high costs in an area would 

preclude exploration and development 

without an exemption. 

How Does MMS Act on Bids? 

§ 256.416 What does MMS do with my bid? 

(a) The MMS opens the sealed bids at 

the place, date, and hour specified in 

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the notice of sale for the sole purpose of 

publicly announcing and recording the 

bids. We do not accept or reject any bids 

at that time. 

(b) The MMS accepts or rejects all 

bids within 90 days, although we may 

extend that time if necessary. We 

reserve the right to reject any and all 

bids, regardless of the amount offered. If 

your bid is rejected, we will refund any 

money deposited with your bid plus any 

interest accrued. 

(c) If the highest bids are tied, MMS 

will notify the tied bidders. Within 15 

days after notification, the tied bidders 

may agree to accept the lease jointly, if 

not otherwise prohibited from bidding 

together. The tied bidders must notify 

MMS of their decision and submit a 

copy of their agreement to accept the 

lease jointly. Or, they may decide 

between themselves which bidder(s) 

will become the lessee, and notify MMS 

of their decision. If there is no such 

agreement, we will award the lease to 

the high bidder selected by lot. 

(d) The MMS offers the Attorney 

General the opportunity to review the 

results of the sale before we accept the 

bids and issue the leases. 

§ 256.417 What may I do if my bid is 

rejected? 

You may ask MMS in writing for 

reconsideration within 15 days of bid 

rejection. You will receive a written 

response either affirming or reversing 

the rejection. 

Awarding the Lease 

§ 256.420 What happens if I am the 

successful high bidder? 

If you are the successful bidder, you 

will receive the appropriate number of 

copies of the lease on a form approved 

by MMS. 

(a) When you receive the lease copies, 

within 11-business days after receipt, 

you must: 

(1) Execute the lease; 

(2) Pay the first year’s rental; 

(3) Pay the balance of the bonus, 

unless deferred under (b) below; and 

(4) File a bond under subpart E of this 

part. 

(b) If provided for in the notice of 

sale, we may defer any part of the bonus 

payment for up to 5 years after the sale 

according to a schedule included in the 

notice of sale. You must provide a bond 

acceptable to us for payment of a 

deferred bonus. 

(c) If you do not execute and return 

the lease within 11 business days after 

receipt, or if you otherwise fail to 

comply with applicable regulations, 

your deposit will be forfeited and MMS 

may take appropriate action to collect 

the full amount bid, if so provided for 

in the notice of sale. However, we will 

return any deposit with interest if the 

tract is withdrawn from leasing before 

you execute the lease. 

(d) If you use an agent to execute the 

lease, you must include evidence with 

the executed copies of the lease form 

that you authorized the agent to act for 

you. After you comply with all 

requirements in this section, and after 

we have executed the lease, we will 

send you an executed copy. 

§ 256.421 When is my lease effective? 

Your lease is effective on the first day 

of the month following the date that 

MMS executes the lease. You may 

request in writing, before we execute the 

lease, that your lease be effective as of 

the first day of the month in which we 

execute it. 

Subpart E—Financial Accountability 

and Risk Management 

General Bonds 

§ 256.500 What security must I provide 

when I obtain my lease? 

(a) Before MMS will issue your lease 

or approve an assignment of an existing 

lease, you must provide one of the 

following general bonds on Form MMS– 

2028: 

(1) A lease-specific $50,000 general 

bond that guarantees compliance with 

all terms and conditions of the lease; or 

(2) An area-wide $300,000 general 

bond that guarantees compliance with 

all terms and conditions of all your 

leases in the area where your lease is 

located; or 

(3) A lease-specific or area-wide 

general bond as required for exploration 

or development and production 

activities as specified in § 256.501. 

(b) For the purpose of an area-wide 

bond, the areas are each planning area 

as administered by MMS. 

(c) You have met the bonding 

requirement under this section if your 

designated lease operator provides a 

lease-specific or area-wide general bond 

that guarantees compliance with all 

terms and conditions of the lease, as 

required under § 256.501. 

(d) The MMS may adjust the dollar 

amount of the general bonds described 

in this section by using the Implicit 

Price Deflator for Gross Domestic 

Product or a substantially equivalent 

index. 

§ 256.501 Do my general bonding 

requirements change as activities progress 

on my lease? 

The table in this paragraph contains 

the general bond requirements for each 

stage of activity on your lease. Each 

bond must guarantee compliance with 

all terms and conditions of the lease. 

You may satisfy these bond 

requirements with a new bond or by 

increasing the amount of your existing 

bonds required under § 256.500. 

Stage of 

activity 

Amount of 

general bond Deadline for submission Exceptions 

(a) Before lease exploration activities begin.$200,000 Earlier of either of the following: The date you 

submit an Exploration Plan (EP) for approval; 

or the date you, as an assignee, submit a request for approval of assignment of a lease 

with an approved EP 

The Regional Director may authorize you to submit the $200,000 bond after you submit an EP, 

but before we approve drilling activities under 

the EP. You need not submit and maintain a 

$200,000 lease exploration bond if you furnish 

and maintain either: 

(1) A $1 million area-wide bond issued by a certified surety and conditioned on compliance 

with all the terms and conditions of all leases 

in the area; or 

(2) A $3 million area-wide bond under paragraph 

(b) of this table. 

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Stage of 

activity 

Amount of 

general bond Deadline for submission Exceptions 

(b) Before lease development and production activities begin.$500,000 Earlier of either of the following: The date you 

submit a Development and Production Plan 

(DPP) or Development Operations Coordination Document (DOCD) for approval; or the 

date you, as an assignee, submit a request for 

approval of assignment of a lease with an approved DPP or DOCD 

The Regional Director may authorize you to submit the $500,000 lease development bond 

after you submit a DPP or DOCD, but before 

we approve the installation of a platform or the 

commencement of drilling activities under the 

DPP or DOCD. You need not submit and 

maintain a $500,000 lease development bond 

if you furnish and maintain a $3 million areawide bond that is issued by a certified surety 

and conditioned on compliance with all the 

terms and conditions of all leases in the area. 

We may accept a bond of less than $500,000 

if: 

(1) You can demonstrate that wells and platforms can be abandoned and removed and 

drilling and platform sites cleared of obstructions for less than $500,000; and 

(2) The bond is at least equal to the cost of well 

abandonment, platform removal, and site 

clearance. 

§ 256.502 What instruments other than a 

surety bond may I use to provide the 

required security? 

You may pledge U.S. Department of 

Treasury securities or other types of 

security instruments if MMS determines 

that such security protects us to the 

same extent as the required bond. If you 

use a Treasury security: 

(a) You must post 115 percent of your 

bonding amount. 

(b) You must daily monitor the 

collateral value of your security. If the 

collateral value of your security, as 

determined in accordance with the 31 

CFR part 225 Collateral Margins Table 

(which can be found at http:// 

www.treasurydirect.gov) falls below the 

required level of coverage, you must 

within 10-business days, pledge 

additional security to provide the 

required amount. 

(c) You must include with your 

pledge, authority for us to sell the 

security and use the proceeds if we 

determine that you have failed to 

comply with any of the terms and 

conditions of your lease, right-of-way 

(ROW), or right-of-use and easement 

(RUE), any subsequent approval or 

authorization, or applicable regulations. 

§ 256.503 What general requirements must 

my bond or other security meet? 

(a) Any bond or other security that 

you provide must: 

(1) Be payable to MMS upon demand; 

(2) Guarantee compliance under the 

lease and regulations of all of your nonmonetary obligations and those of all 

lessees, operating rights owners, and 

operators on the lease; and 

(3) Guarantee all of your monetary 

obligations. 

(b) All surety bonds and Treasury 

notes must be on an official form 

approved by MMS. You may submit a 

bond on an approved form that you 

have reproduced. If the document you 

submit either advertently or 

inadvertently omits any terms and 

conditions that are included on the 

approved form, your bond is deemed to 

contain the omitted terms and 

conditions of the official form. 

(c) The MMS reserves the right to 

require electronic filing with a 90-day 

notice published in the Federal 

Register. 

(d) Surety bonds must be issued by a 

surety that the Treasury certifies as 

acceptable to provide bonds to Federal 

agencies by listing in the current 

Treasury Circular 570, as required by 31 

CFR 223.16. You may obtain a copy of 

Circular 570 from the Treasury Web site 

at http://www.fms.treas.gov. 

(e) You and a certified surety must 

execute your bond. When the surety is 

a corporation, an authorized corporate 

officer must sign the bond and attest to 

it over the corporate seal, and include 

the power of attorney authorizing said 

officer to bind the security. 

(f) You may not terminate the period 

of liability of, or cancel your bond, 

except as provided in this subpart. 

Bonds must continue in full force and 

effect even though an event has 

occurred that could diminish, terminate, 

or cancel a surety’s obligation under 

State law. 

§ 256.504 Must my surety bond cover the 

payment obligations of my co-lessees and 

designated operators? 

You may exclude from coverage the 

payment obligations of a co-lessee or 

designated operator from your bond by 

giving MMS a written statement 

specifying which co-lessees and 

designated operators are to be excluded. 

The exclusion of payment obligations 

from coverage does not exclude the nonpayment obligations of the lease. 

§ 256.505 What happens if my co-lessees 

or designated operators exclude my 

payment obligations from their bond? 

You must post a bond at the level 

specified in this subpart for the level of 

activity on the lease. We may require a 

lesser amount if you can demonstrate 

that your payment obligations are less 

than the bond amounts required. 

Supplemental Bonds 

§ 256.510 Can MMS require that I post a 

supplemental bond? 

(a) To ensure coverage of potential 

lease, ROW, or RUE decommissioning 

liabilities and/or other obligations, 

MMS may determine that you need to 

provide a supplemental bond as security 

in addition to the requirements under 

§§ 256.500 and 256.501 for general 

bonds. The Regional Director may 

require you to demonstrate the 

sufficiency of your bond to accomplish 

your lease obligations. You must submit 

supplemental bonds on Form MMS– 

2028A. 

(b) A requirement to post a 

supplemental bond(s) will be based on 

the Regional Director’s determination of 

the cost to meet all accrued and 

anticipated obligations of your lease(s), 

ROW(s), or RUE(s), including those 

arising from operating rights interests, 

and an evaluation of the probability that 

you will be able to carry out present and 

future financial obligations as 

demonstrated by: 

(1) Financial capacity substantially in 

excess of existing and anticipated lease 

and other obligations, as evidenced by 

audited financial statements (including 

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auditor’s certificate, balance sheet, and 

profit and loss sheet); 

(2) Projected financial strength 

significantly in excess of existing and 

future lease and other obligations based 

on the estimated value of your existing 

OCS lease production; 

(3) Business stability based on 5 years 

of continuous operation and production 

of oil and gas or sulphur in the OCS or 

onshore; 

(4) Reliability in meeting obligations 

based on credit ratings or trade 

references, including names and 

addresses of other lessees, drilling 

contractors, and suppliers with whom 

you have dealt; and 

(5) A record of compliance with laws, 

regulations, and lease, ROW, or RUE 

terms. 

(c) The MMS determines the amount 

of supplemental bond required to 

guarantee compliance. The Regional 

Director performs a case-specific 

analysis and considers such items as the 

potential underpayment of royalties; the 

cumulative obligations to abandon wells 

and remove platforms and facilities; and 

the requirement to clear the seafloor of 

obstructions. 

(d) If your cumulative potential 

obligations and liabilities increase or 

decrease, MMS may adjust the amount 

of the supplemental bond required. 

(1) The MMS will notify you of any 

proposed adjustment to your bond 

amount and give you an opportunity to 

comment. 

(2) If you request a reduction, you 

must submit evidence to the Regional 

Director that the projected amount of 

royalties due the Government over the 

next 12 months, any past due royalties, 

other payment obligations, and the 

estimated costs of your required 

decommissioning and cleanup, are less 

than the required bond amount. If MMS 

agrees, we will reduce the amount of the 

supplemental bond required. 

(e) Your supplemental bond must 

meet the requirements specified for 

general bonds under § 256.503. You may 

utilize U.S. Department of the Treasury 

securities or other types of security 

instruments that MMS determines 

protect us to the same extent as the 

required bond. If you use a Treasury 

security, you must meet the 

requirements specified for general 

bonds in § 256.502. 

§ 256.511 May I use a third-party guaranty 

to meet the supplemental bonding 

requirement? 

(a) You may use a third-party 

guaranty if the guarantor meets the 

criteria prescribed in paragraph (b) of 

this section and submits an agreement 

meeting the criteria prescribed in 

paragraph (c) of this section. The 

agreement must guarantee compliance 

with the obligations of all lessees, 

operating rights owners, and operators 

on the lease(s), ROW(s), and RUE(s). 

(b) The MMS will consider the 

following factors in deciding whether to 

accept an agreement: 

(1) The length of time that your 

guarantor has been in continuous 

operation as a business entity. You may 

exclude periods of interruption that are 

beyond the guarantor’s control by 

demonstrating, to the satisfaction of the 

Regional Director, that the interruptions 

do not affect the likelihood of your 

guarantor remaining in business during 

exploration, development, production, 

and decommissioning operations on 

your lease(s), ROW(s), and RUE(s) 

covered by the indemnity agreement. 

(2) Financial information available in 

the public record or submitted by your 

guarantor in sufficient detail to show us 

that your guarantor meets the criteria 

stated in paragraph (b)(4) of this section. 

Such detail includes: 

(i) The current rating for its most 

recent bond issuance by a generally 

recognized bond rating service such as 

Moody’s Investor Service or Standard 

and Poor’s Corporation; 

(ii) Your guarantor’s net worth, taking 

into account liabilities for compliance 

with all terms and conditions of your 

lease, regulations, and other guarantees; 

(iii) Your guarantor’s ratio of current 

assets to current liabilities, taking into 

account liabilities for compliance with 

all terms and conditions of your lease, 

regulations, and other guarantees; and 

(iv) Your guarantor’s unencumbered 

domestic fixed assets. 

(3) If the information in paragraph 

(b)(2) of this section is not publicly 

available, your guarantor must submit 

the information in the following table, 

to be updated annually within 90 days 

of the end of the fiscal year (FY) or as 

otherwise prescribed. 

Your guarantor must submit . . . That . . . 

(i) Financial statements for the most recently completed FY Include a report by an independent certified public accountant containing the accountant’s audit or review opinion of the statements. 

The report must be prepared in conformance with generally accepted 

accounting principles and contain no adverse opinion. 

(ii) Financial statement for completed quarter in the current FY Your guarantor’s financial officer certifies to be correct. 

(iii) Additional information related to bonds, if requested by the Regional Director Your guarantor’s financial officer certifies to be correct. 

(4) Your guarantor’s total outstanding 

and proposed guarantees must not 

exceed 25 percent of its unencumbered 

domestic net worth. 

(c) Your guarantor must submit an 

agreement executed by the guarantor 

and all parties bound by the agreement. 

All parties are bound jointly and 

severally and must meet the 

qualifications set forth in §§ 256.400 

and 256.401. 

(1) When any party is a corporation, 

two corporate officers authorized to 

execute the indemnity agreement on 

behalf of the corporation must sign the 

agreement. 

(2) When any party is a partnership, 

joint venture, or syndicate, the 

indemnity agreement must bind each 

party who has a beneficial interest in 

your guarantor and provide that, upon 

MMS demand under your guaranty, 

each party is jointly and severally liable 

for compliance with all terms and 

conditions of your lease(s), ROW(s), and 

RUE(s) covered by the agreement. 

(3) When forfeiture of the guaranty is 

called for, the agreement must provide 

that your guarantor will either bring 

your lease(s), ROW(s), and RUE(s) into 

compliance or provide, within 7- 

calendar days, sufficient funds to permit 

MMS to complete corrective action. 

(4) The guaranty agreement must 

contain a confession of judgment, 

providing that, if we determine that you 

are, or your operator or operating rights 

owner is, in default, the guarantor must 

not challenge the determination and 

must remedy the default. 

(5) If you fail, or your operator or 

operating rights owner fails, to comply 

with any law, term, or regulation, your 

guarantor must either take corrective 

action or provide, within 7-calendar 

days or other agreed upon time period, 

sufficient funds for MMS to complete 

corrective action. Such compliance 

must not reduce your guarantor’s 

liability. 

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(6) If your guarantor wants to 

terminate the period of liability, your 

guarantor must notify you and us at 

least 90 days before the proposed 

termination date, obtain our approval 

for termination of all or a specified 

portion of the guarantee for liabilities 

arising after that date, and remain liable 

for all your work performed during the 

period the agreement is in effect. 

(7) Each guaranty submitted pursuant 

to this section is deemed to contain all 

the above terms, even if they are not 

actually in the agreement. 

(d) If your guaranty is to be 

terminated, you must provide an 

acceptable replacement in the form of a 

bond or other security before the 

termination. 

§ 256.512 May I use a lease, right-of-way 

(ROW), or right-of-use and easement (RUE)- 

specific decommissioning account to meet 

the supplemental bonding requirement? 

(a) The MMS may authorize you to 

establish a lease, ROW, or RUE-specific 

decommissioning account in a 

Federally-insured institution in lieu of a 

supplemental bond. The funds must not 

be withdrawn from the account without 

written approval by MMS. 

(1) The funds must be payable to 

MMS and pledged to meet your 

decommissioning obligations. 

(2) You must fully fund the account 

to cover all costs of decommissioning, 

including site clearance within the time 

we prescribe. The MMS will estimate 

the cost of decommissioning and site 

clearance. 

(b) Any interest paid on the account 

will be treated as account funds unless 

MMS authorizes in writing that any 

interest be paid to the depositor. 

(c) The Regional Director may allow 

you to pledge Treasury securities 

payable to MMS on demand to satisfy 

your obligation to make payments into 

the account. Acceptable Treasury 

securities and their collateral value are 

defined in 31 CFR part 380. 

(d) The MMS may require you to 

create an overriding royalty or 

production payment obligation for the 

benefit of the account. The obligation 

may be associated with production from 

another lease. 

Changes in Bonding or Security 

§ 256.520 What do I do if my bond lapses? 

(a) If your surety is decertified by the 

Treasury, becomes bankrupt or 

insolvent, or if your surety’s charter or 

license is suspended or revoked, you 

must provide alternate security 

immediately. You must promptly 

inform MMS about the bond lapse and 

provide a new bond to us in the amount 

required under this subpart. 

(b) You and your surety must notify 

MMS within 72 hours after you learn of 

any action filed alleging that you are, or 

your surety or guarantor is, insolvent or 

bankrupt, or has been decertified by the 

U.S. Treasury. 

§ 256.521 What happens if the value of my 

bond or other security is reduced? 

If the value of your bond or other 

security is reduced because of a default 

or any other reason, you must provide 

additional bond coverage sufficient to 

meet the requirements of this subpart 

within 45 days; however, MMS may 

specify a shorter period of time. 

§ 256.522 What happens if my surety 

wants to terminate the period of liability of 

my bond? 

(a) Terminating the period of liability 

of a bond ends the period during which 

obligations continue to accrue, but does 

not relieve the surety of the 

responsibility for obligations and 

liabilities that accrued during the period 

of liability and before the date on which 

MMS terminates the period of liability 

under paragraph (b) of this section. The 

liabilities that accrue during a period of 

liability include: 

(1) Obligations that started to accrue 

prior to the beginning of the period of 

liability and had not been met, and 

(2) Obligations that began accruing 

during the period of liability. 

(b) Your surety must submit its 

request to MMS to terminate the period 

of liability under its bond and notify 

you of that request. We will terminate 

that period of liability within 90 days 

after we receive the request. If you 

intend to continue operations, or have 

not met all end-of-lease obligations, we 

will require you to provide a 

replacement bond of equivalent value. 

(c) If the period of liability is 

terminated but the bond is not cancelled 

under § 256.523, the surety that 

provided the bond must continue to be 

liable for accrued obligations until all 

obligations are satisfied. 

§ 256.523 What happens if my surety 

wants to cancel my bond? 

(a) The MMS will cancel or release a 

bond and relieve the surety from 

accrued obligations only if: 

(1) The MMS determines that there 

are no outstanding obligations; or 

(2) You furnish a replacement bond or 

an alternative form of security in an 

amount equal to or greater than the 

bond to be cancelled to cover the 

terminated period of liability and: 

(i) Before MMS will cancel a general 

bond prescribed under §§ 256.500 or 

256.501 on the basis of a replacement 

bond, the surety issuing the new bond 

must expressly agree to assume all 

outstanding liabilities that accrued 

during the period of liability that was 

terminated. 

(ii) Before MMS will cancel a 

supplemental bond on the basis of a 

replacement bond, the surety issuing the 

new bond must agree to assume that 

portion of the outstanding liabilities that 

accrued during the terminated period of 

liability that exceeds the coverage of the 

bond prescribed under §§ 256.500 or 

256.501 and of which you were notified. 

(b) When your lease ends, your 

surety(s) remain(s) responsible and 

MMS will retain any pledged security as 

shown in the table below: 

Bond type: The period of liability ends: Your bond will be cancelled: 

(1) General bonds submitted under 

§§ 256.500 or 256.501.

When MMS determines that you 

have met all of your obligations 

under the lease.

Seven years after the lease ends, 6 years after completion of all 

bonded obligations, or at the conclusion of any appeals or litigation 

related to your bonded obligation, whichever is the latest. The 

MMS will reduce the amount of your bond or return a portion of 

your security, if we determine that you need less than the full 

amount of the bond to meet any possible future obligations. 

(2) Supplemental bonds submitted 

under this subpart.

When MMS determines that you 

have met all your obligations 

covered by the supplemental 

bond.

When you meet your bonded obligations, unless MMS: 

(i) Determines that the future potential liability resulting from any undetected obligations is greater than the amount of the base bond; 

and 

(ii) Notifies the provider of the bond that we will wait 7 years before 

canceling all or a part of the bond, or a longer period as necessary 

to complete any appeals or judicial litigation related to your bond 

obligation. 

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Federal Register / Vol. 74, No. 100 / Wednesday, May 27, 2009 / Proposed Rules 25197 

§ 256.524 Why might MMS call for 

forfeiture of my bond? 

(a) The MMS may call for forfeiture of 

all or part of the bond or pledged 

security or performance by your 

guarantor if: 

(1) After notice and demand for 

performance by MMS, you refuse or fail, 

within the timeframe we prescribe, to 

comply with any term or condition of 

your lease; or 

(2) You default on one of the 

conditions under which we accepted 

your bond. 

(b) The MMS may pursue forfeiture 

without first making demands for 

performance against any other lessee, 

operating rights owner, or other person 

approved to perform lease obligations. 

§ 256.525 How will I know about this 

forfeiture? 

(a) The MMS will notify you and your 

surety or guarantor in writing of the call 

for forfeiture and provide the reasons for 

the forfeiture and the amount to be 

forfeited. We will base the amount upon 

our estimate of the total cost of 

corrective action to bring your lease into 

compliance. 

(b) The MMS would advise you, your 

guarantor, and any surety that you may 

avoid forfeiture if, within 5 business 

days: 

(1) You, or your guarantor, agree(s) to 

and demonstrate(s) that you will bring 

your lease into compliance within the 

timeframe we prescribe; or 

(2) Your surety agrees to, and 

demonstrates that, it will bring your 

lease into compliance within the 

timeframe we prescribe, even if the cost 

of compliance exceeds the face amount 

of the bond. 

§ 256.526 What if correcting my default 

requires a change in the amount of my 

bond? 

(a) If MMS demands forfeiture of your 

bond, we will collect the forfeited 

amount and use the funds to bring your 

lease(s) into compliance and correct any 

default. 

(b) If the amount collected under your 

bond is insufficient to pay the full cost 

of corrective action, MMS may take or 

direct action to obtain full compliance 

and recover all costs in excess of the 

forfeited bond from you, any co-lessee, 

operating rights owner, or responsible 

guarantor. 

(c) If the amount collected under your 

bond exceeds the full cost of corrective 

action to bring your lease(s) into 

compliance, MMS will return the excess 

funds to the party from whom they were 

collected. 

Subpart F—Maintaining a Lease 

Initial Period of a Lease 

§ 256.600 What is the initial period of my 

oil and gas lease? 

(a) The initial period of your oil and 

gas lease may range from 5 to 10 years. 

The MMS will specify the initial period 

in the notice of sale and in the lease 

instrument. 

(b) For leases in water depths of 400 

to 799 meters, unless otherwise 

provided for in the notice of sale, the 

initial period will be 8 years but you 

must begin an exploratory well within 

the first 5 years. Your lease will be 

subject to administrative cancellation 

after 5 years if you have not begun an 

exploratory well. 

§ 256.601 How may I maintain my oil and 

gas lease beyond the initial period? 

(a) You may maintain your oil and gas 

lease beyond the initial period as long 

as you are producing oil or gas in paying 

quantities, you are granted a 

suspension, or you are conducting 

approved drilling or well reworking 

operations, in accordance with 30 CFR 

part 250. 

(b) You may maintain your oil and gas 

lease by producing from, or drilling or 

reworking approved directional wells 

under your lease that originates from the 

surface of the seabed adjacent to or 

adjoining your lease. 

(c) You may maintain your oil and gas 

lease if your lease is being drained by 

a well on another lease and you are 

paying compensatory royalty. 

(d) You may maintain your oil and gas 

lease if the lease, or part of the lease, is 

part of an MMS-approved unit 

agreement, and there either is 

production allocated to your lease, a 

suspension of unit operations, or the 

unit is conducting approved drilling or 

well-reworking operations in 

accordance with 30 CFR part 250. 

§ 256.602 What is the initial period of my 

sulphur lease? 

Your sulphur lease will have an 

initial period of not more than 10 years. 

The MMS will announce the initial 

period prior to the lease sale. Your lease 

will be subject to administrative 

cancellation after 5 years if you have not 

begun an exploratory well. 

§ 256.603 How may I maintain my sulphur 

lease beyond the initial period? 

You may maintain your sulphur lease 

after the initial period as long as you are 

producing sulphur in paying quantities; 

granted a suspension; or conducting 

drilling, reworking, plant construction, 

or other operations necessary to the 

production of sulphur. 

Lease Obligations 

§ 256.605 What are my obligations as a 

record title owner? 

(a) As a record title owner, you are 

responsible for all performance on the 

lease, including paying any rent and 

royalty due. If there is more than one 

record title or operating rights owner, 

each of you are jointly and severally 

liable for non-monetary lease 

obligations, including the obligation to 

protect the lease from drainage and to 

pay compensatory royalty that may be 

owed. You are also jointly and severally 

liable for plugging and abandonment 

obligations that accrue while you hold 

record title interest. For example, this 

means that if you own 50 percent record 

title interest, MMS may hold you 

responsible for 100 percent of the nonmonetary obligations, if your joint 

owner(s) default(s). 

(b) For monetary obligations, such as 

paying rent and royalty, your obligation 

is proportionate to your interest. For 

example, if you own 25 percent of the 

record title interest, you are liable for 

only 25 percent of the rent or royalty on 

production. As a record title owner, you 

also are secondarily liable for monetary 

obligations of any operating rights 

holders on the lease. 

§ 256.606 What are my rights and 

obligations as an operating rights owner? 

(a) As an operating rights owner, you 

have the right to enter the leased area to 

conduct drilling and related operations 

including production according to the 

lease terms and applicable regulations. 

(b) You have the right to authorize 

another party to conduct operations on 

the lease. 

(c) You are jointly and severally liable 

with other record title owners and 

operating rights holders in the lease for 

all non-monetary lease obligations 

pertaining to that portion of the lease 

subject to your operating rights. 

(d) You are liable for monetary 

obligations pertaining to that portion of 

the lease subject to your operating rights 

with other operating rights holders in 

proportion to your share of such 

operating rights. 

Transferring Interest in All or Part of a 

Lease 

§ 256.610 May I sell, exchange, assign, or 

otherwise transfer my lease? 

No lease issued under this part may 

be sold, exchanged, assigned, or 

otherwise transferred except with the 

approval of MMS. 

§ 256.611 May I assign all or part of my 

lease interest? 

You may assign all or part of your 

lease interest subject to MMS approval. 

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25198 Federal Register / Vol. 74, No. 100 / Wednesday, May 27, 2009 / Proposed Rules 

Each instrument that creates or transfers 

an interest must describe the entire tract 

or describe, by officially designated 

subdivisions, the interest you propose to 

create or transfer. Officially designated 

subdivisions, or aliquot parts, are a half 

(1⁄2), a quarter (1⁄4), a quarter of a quarter 

(1⁄41⁄4), and a quarter of a quarter of a 

quarter (1⁄41⁄41⁄4). We may disapprove an 

assignment when the assignor or 

assignee has outstanding or unsatisfied 

obligations under this chapter. 

§ 256.612 May I assign operating rights? 

You may assign your operating rights 

in all or part of your lease subject to 

MMS approval. However, you may 

create subleases of only two depth 

levels per aliquot part. Operating rights 

must be described by officially 

designated subdivisions, or aliquot 

parts, and limited to specific depths 

within those subdivisions. 

§ 256.613 How do I seek approval of an 

assignment? 

(a) You must request approval of each 

assignment and submit to MMS two 

originals of each instrument that creates 

or transfers ownership of record title or 

operating rights within 90 days after the 

last party executes the transfer 

agreement. You must pay the service fee 

listed in § 256.104 with your request. 

(1) All assignments must be on the 

appropriate form approved by MMS. 

(i) Form MMS–150 entitled, 

Assignment of Record Title Interest in 

Federal OCS Oil and Gas Lease. 

(ii) Form MMS–151 entitled, 

Assignment of Operating Rights Interest 

in Federal OCS Oil and Gas Lease. 

(2) When an assignment is made of 

100 percent of the record title interest in 

an officially designated subdivision of 

your lease, that assignment creates a 

new lease. Your assignee becomes the 

leaseholder of the newly segregated 

lease that is subject to all the terms and 

conditions of your original lease, 

including the requirement to furnish a 

bond in the amount required in subpart 

E of this part. 

(b) Before MMS approves an 

assignment, we will consult with and 

consider the views of the Attorney 

General. 

§ 256.614 How do I transfer the interest of 

a deceased leaseholder? 

(a) If any of the leaseholders are 

deceased, you as heir or devisee must 

provide evidence as to who are the 

lawful successors in interest. 

(b) You as heir or devisee must submit 

a certified copy of an appropriate court 

order or decree; or if no court action is 

necessary, a certified copy of the will or 

the statements of two disinterested 

parties with knowledge of the facts. 

(c) You as heir or devisee must submit 

statements that you are the person 

named as successor in interest along 

with evidence of your qualifications to 

hold a lease under subpart D of this 

part. 

(d) If you do not qualify to hold a 

lease under subpart D of this part, you 

will be recognized as the successor in 

interest, but must divest your interest in 

the lease within 2 years. 

§ 256.615 What if I want to assign interests 

in more than one lease at the same time? 

To assign interests in more than one 

lease at the same time, you must file a 

separate form and two originals of the 

instrument that creates or transfers 

ownership for each lease assigned. 

However, if all leases are being 

transferred to the same entity, you need 

submit only one application letter of 

request for approval. 

§ 256.616 What is the effect of an 

assignment on an assignor’s liability? 

As assignor, you are liable for all 

obligations, monetary and nonmonetary, that accrued under your lease 

before MMS approves your assignment. 

Our approval of the assignment does not 

relieve you of these accrued obligations 

if your assignee, or any subsequent 

assignee, fails to perform. In addition, 

MMS may require you to bring the lease 

into compliance to the extent the 

obligation accrued before approval of 

your assignment, if your assignee or any 

subsequent assignee, fails to perform 

any obligation under the lease. You 

remain liable for all obligations if you 

create a sublease of operating rights 

only. 

§ 256.617 May I specify an effective date of 

the assignment? 

The MMS will record the assignment 

as effective on the date you specify. If 

you do not specify a date, the 

assignment is effective on the first day 

of the month following your request to 

assign. Regardless of the effective date, 

the date that we approve the assignment 

determines when the assignor’s 

liabilities cease to accrue. 

§ 256.618 What is the effect of an 

assignment on an assignee’s liability? 

As assignee, you and any subsequent 

assignees are liable for all obligations 

that have accrued or will accrue after 

MMS approves the assignment. As 

assignee, you must comply with all the 

terms and conditions of the lease and 

regulations issued under the Act, 

remedy all existing environmental and 

operational problems on the lease, 

properly abandon all wells, and reclaim 

the site as required under 30 CFR part 

250. 

§ 256.619 As a restricted joint bidder, may 

I assign interest to another restricted joint 

bidder? 

If you are a restricted joint bidder, you 

may assign all or part of your interest in 

a lease to another restricted joint bidder. 

However, if you want to assign less than 

your entire interest to another restricted 

joint bidder, you must submit to MMS 

a copy of any agreements relating to 

your acquisition of the lease or interest. 

The MMS may ask the Attorney General 

to review your request. 

§ 256.620 Are there any interests I may 

assign without MMS approval? 

(a) You may create or transfer carried 

working interests, overriding royalty 

interests, or payments out of production 

without MMS approval. However, you 

must send us a copy of each instrument 

creating or transferring such interests for 

record purposes. For each lease affected, 

you must pay the service fee listed in 

§ 256.104 with your documents 

submitted for record. 

(b) If you submit documents for 

record purposes that are not required by 

these regulations, for each lease 

affected, you must pay the service fee 

listed in § 256.104 with your document 

submissions. The MMS may decline to 

accept for filing such documents and 

the service fee will not be refunded. 

§ 256.621 What reports must I submit for 

lease term pipelines when MMS approves a 

lease assignment? 

Within 30 calendar days after MMS 

approves an assignment of a lease, or 

approves a new designation of operator 

for a lease under § 250.143 or § 250.144, 

you (the new lessee or designated lease 

operator) must submit a report to the 

Regional Supervisor that: 

(a) Lists every lease term pipeline (see 

definition at § 250.105), including 

decommissioned pipelines on the lease; 

and 

(b) Indicates which pipelines 

remained as lease term pipelines after 

the lease assignment was approved by 

MMS. 

Helium 

§ 256.630 What must a lessee do if MMS 

elects to extract helium from a lease? 

(a) The MMS reserves the ownership 

of, and the right to extract, helium from 

all gas produced from your OCS lease. 

Under section 12(f) of the Act, 43 U.S.C. 

1341(f), upon our request, you must 

deliver all or a specified portion of the 

gas containing helium to us at a point 

on the lease or an onshore processing 

facility that we designate. 

(b) The MMS will determine 

reasonable compensation and pay you 

for any loss caused by the extraction of 

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Federal Register / Vol. 74, No. 100 / Wednesday, May 27, 2009 / Proposed Rules 25199 

helium, except for the value of the 

helium itself. We may erect, maintain, 

and operate on your lease any reduction 

work and other equipment necessary for 

helium extraction. Our extraction of 

helium will be conducted in a manner 

to not cause substantial delays in the 

delivery of gas to your purchaser. 

Subpart G—Ending a Lease 

§ 256.700 How does a lease end? 

Your lease will expire by its own 

terms at the end of its initial period, if 

you have not taken actions to extend the 

lease through production in paying 

quantities, drilling operations, workover 

operations, or a suspension under 30 

CFR part 250. 

§ 256.701 May I end the lease myself? 

You may join with all record title 

owners to relinquish all or any officially 

designated subdivision of your lease at 

any time by filing three original copies 

of your request with MMS on Form 

MMS–152 entitled, Relinquishment of 

Federal OCS Oil and Gas Lease. The 

relinquishment is effective on the date 

of filing. Relinquishing your lease does 

not relieve you of any accrued 

obligations, either monetary or nonmonetary. 

§ 256.702 Will MMS end my lease? 

(a) The MMS may cancel your lease 

under section 5(a) of the Act, 43 U.S.C. 

1334(a), if we find that continued 

activity would probably cause serious 

harm or damage to life, property, any 

mineral, National security or defense, or 

to the marine, coastal, or human 

environment; that the threat or harm or 

damage will not disappear or decrease 

to an acceptable level within a 

reasonable period of time; and that the 

advantages of cancellation outweigh the 

advantages of continuing the lease. 

Refer to 30 CFR part 250, subpart A, for 

procedures on lease cancellation and 

compensation. 

(b) The MMS may cancel your nonproducing lease if you fail to comply 

with any provision of the Act, lease, or 

applicable regulations, if the failure 

continues for 30 days after we send you 

written notice of such failure. 

Cancellation is subject to judicial review 

under section 23(b) of the Act, 43 U.S.C. 

1349(b). 

(c) The MMS may cancel your 

producing lease if you fail to comply 

with any provision of the Act, lease, or 

applicable regulations, only after the 

judicial proceedings required under 

section 5(d) of the Act, 43 U.S.C. 

1334(d). 

(d) The MMS may cancel your lease 

if we find proof that the lease was 

obtained by fraud or misrepresentation. 

You will have notice and an 

opportunity to be heard prior to lease 

cancellation. 

Subpart H—[Reserved] 

Subpart I—Bonus or Royalty Credits 

for Exchange of Certain Leases 

§ 256.900 Which leases may I exchange for 

a bonus or royalty credit? 

You may exchange a lease for a bonus 

or royalty credit if it: 

(a) Was in effect on December 20, 

2006, and 

(b) Is located in: 

(1) The Eastern planning area and 

within 125 miles of the coastline of the 

State of Florida, or 

(2) The Central planning area and 

within the Desoto Canyon OPD, the 

Destin Dome OPD, or the Pensacola 

OPD and within 100 miles of the 

coastline of the State of Florida. 

§ 256.901 How much bonus or royalty 

credit will MMS grant in exchange for a 

lease? 

The amount of the bonus or royalty 

credit for an exchanged lease equals the 

sum of: 

(a) The amount of the bonus payment; 

and 

(b) All rental paid for the lease as of 

the date the lessee submits the request 

to exchange the lease under § 256.902 to 

MMS. 

§ 256.902 What must I do to obtain a 

bonus or royalty credit? 

(a) To obtain the bonus or royalty 

credit, all of the record title interest 

owners in the lease must submit the 

following to the MMS Regional 

Supervisor for Leasing and Environment 

for the GOM on or before October 12, 

2010: 

(1) A written request to exchange the 

lease for the bonus or royalty credit, 

signed by all record title interest owners 

in the lease. 

(2) The name and contact information 

for a person who will act as a contact 

for each record title interest owner. 

(3) Documentation of each record title 

interest owner’s percentage share in the 

lease. 

(4) A list of all bonus and rental 

payments for that lease made by, or on 

behalf of, each of the current record title 

owners. 

(5) A written relinquishment of the 

lease as described in § 256.701. 

Notwithstanding § 256.701, the 

relinquishment will become effective 

when the credit becomes effective under 

paragraph (b) of this section. 

(b) The credit becomes effective when 

MMS issues a certification to the record 

title interest owners that the lease has 

qualified for the credit. 

§ 256.903 How is the bonus or royalty 

credit allocated among multiple lease 

owners? 

The MMS will allocate the bonus or 

royalty credit for an exchanged lease to 

the current record title interest owners 

in the same percentage share as each 

owner has in the lease as of the date of 

the request to exchange the lease. 

§ 256.904 How may I use the bonus or 

royalty credit? 

(a) You may use a credit issued under 

this part in lieu of a monetary payment 

due under any lease in the Gulf of 

Mexico not subject to the revenue 

distribution provisions of section 8(g)(2) 

of the OCSLA (43 U.S.C. 1337(g)(2)) for 

either: 

(1) A bonus for acquisition of an 

interest in a new lease; or 

(2) Royalty due on oil and gas 

production after October 12, 2010. 

(b) You may not use a bonus or 

royalty credit in lieu of delivering oil or 

gas taken as royalty-in-kind. 

(c) If you have any credit that remains 

unused after 5 years from the date MMS 

issued the credit, MMS reserves the 

right to apply the remaining credit to 

your ongoing obligations. 

§ 256.905 How do I transfer a bonus or 

royalty credit to another person? 

(a) You may transfer your bonus or 

royalty credit to any other person by 

submitting to the MMS Adjudication 

Unit for the Gulf of Mexico two 

originally executed transfer letters of 

agreement. 

(b) Authorized officers of all 

companies involved in transferring and 

receiving the credit must sign the 

transfer letters of agreement as indicated 

on the qualification card filed with 

MMS. 

(c) A transfer letter of agreement must 

include: 

(1) The effective date of the transfer, 

(2) The OCS–G number for the lease 

that originally qualified for the credit, 

(3) The amount of the credit being 

transferred, 

(4) Company names punctuated 

exactly as filed on the qualification card 

at MMS, and 

(5) A corporate seal, only if MMS 

used a corporate seal qualification 

process for your corporation. 

(d) The transferee of a credit 

transferred under this section may use 

it in accordance with § 256.904 as soon 

as MMS sends a confirmation of the 

transfer to the transferee. 

mstockstill on PROD1PC66 with PROPOSALS

25200 Federal Register / Vol. 74, No. 100 / Wednesday, May 27, 2009 / Proposed Rules 

PART 260—OUTER CONTINENTAL 

SHELF OIL AND GAS LEASING 

5. The authority citation for 30 CFR 

part 260 is revised to read as follows: 

Authority: 43 U.S.C. 1334. 

6. Amend 30 CFR part 260 by 

removing Subpart D. 

[FR Doc. E9–12155 Filed 5–26–09; 8:45 am] 

BILLING CODE 4310–MR–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R09–OAR–2009–0133; FRL–8909–7] 

Approval and Promulgation of Air 

Quality Implementation Plans; 

California; Finding of Attainment of the 

1-Hour Ozone Standard for the Ventura 

County Area 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: On April 15, 2009 the 

California Air Resources Board (CARB) 

requested that EPA find that the Ventura 

County ozone nonattainment area has 

attained the revoked 1-hour ozone 

National Ambient Air Quality Standard 

(NAAQS). After a review of this 

submission and of the relevant 

monitoring data, EPA is proposing to 

make such a finding. 

This finding would relieve the area of 

the requirement to implement 

contingency measures for failure to 

attain the standard by its attainment 

date, as well as Clean Air Act penalty 

fee requirements for severe and extreme 

ozone nonattainment areas that have not 

attained the 1-hour standard by the 

applicable attainment date. 

DATES: Any comments on this proposal 

must arrive by June 26, 2009. 

ADDRESSES: Submit your comments, 

identified by Docket ID No. EPA–R09– 

OAR–2009–0133, by one of the 

following methods: 

1. http://www.regulations.gov. Follow 

the on-line instructions for submitting 

comments. 

2. E-mail: nudd.gregory@epa.gov. 

3. Fax: (415) 947–3579. 

4. Mail or Delivery: Greg Nudd (AIR– 

2), U.S. Environmental Protection 

Agency Region IX, 75 Hawthorne Street, 

San Francisco, CA 94105–3901. 

Instructions: Direct your comments to 

Docket ID No. EPA–R09–OAR–2009– 

0133. EPA’s policy is that all comments 

received will be included in the public 

docket without change and may be 

made available online at http:// 

www.regulations.gov, including any 

personal information provided, unless a 

comment includes information claimed 

to be Confidential Business Information 

(CBI) or other information whose 

disclosure is restricted by statute. Do 

not submit information that you 

consider to be CBI or otherwise 

protected through http:// 

www.regulations.gov or e-mail. The 

http://www.regulations.gov Web site is 

an ‘‘anonymous access’’ system, which 

means EPA will not know your identity 

or contact information unless you 

provide it in the body of your comment. 

If you send an e-mail comment directly 

to EPA without going through http:// 

www.regulations.gov, your e-mail 

address will be automatically captured 

and included as part of the comment 

that is placed in the public docket and 

made available on the Internet. If you 

submit an electronic comment, EPA 

recommends that you include your 

name and other contact information in 

the body of your comment and with any 

disk or CD–ROM you submit. If EPA 

cannot read your comment due to 

technical difficulties and cannot contact 

you for clarification, EPA may not be 

able to consider your comment. 

Electronic files should avoid the use of 

special characters, any form of 

encryption, and be free of any defects or 

viruses. 

Docket: The index to the docket for 

this action is available electronically at 

www.regulations.gov and in hard copy 

at EPA Region IX, 75 Hawthorne Street, 

San Francisco, California. While all 

documents in the docket are listed in 

the index, some information may be 

publicly available only at the hard copy 

location (e.g., copyrighted material), and 

some may not be publicly available at 

either location (e.g., confidential 

business information). To inspect the 

hard copy materials, please schedule an 

appointment during normal business 

hours with the contact listed in the FOR

FURTHER INFORMATION CONTACT section. 

FOR FURTHER INFORMATION CONTACT: Greg 

Nudd, Environmental Engineer, EPA 

Region IX, (415) 947–4107, 

nudd.gregory@epa.gov. 

SUPPLEMENTARY INFORMATION: 

Throughout this document whenever 

‘‘we,’’ ‘‘us,’’ or ‘‘our’’ is used, we mean 

EPA. 

This proposal addresses the California 

Air Resources Board (CARB) request 

that EPA find that the Ventura County 

ozone nonattainment area has attained 

the revoked 1-hour ozone National 

Ambient Air Quality Standard 

(NAAQS). In the Rules and Regulations 

section of this Federal Register, we are 

making this finding as a direct final rule 

without prior proposal because we 

believe this action is not controversial. 

If we receive adverse comments, 

however, we will publish a timely 

withdrawal of the direct final rule and 

address the comments in a subsequent 

action based on this proposed rule. 

We do not plan to open a second 

comment period, so anyone interested 

in commenting should do so at this 

time. If we do not receive adverse 

comments, no further activity is 

planned. For further information, please 

see the direct final action. 

Dated: May 14, 2009. 

Jane Diamond, 

Acting Regional Administrator, Region IX. 

[FR Doc. E9–12137 Filed 5–26–09; 8:45 am] 

BILLING CODE 6560–50–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Parts 260 and 261 

[EPA–HQ–RCRA–2009–0315; FRL–8905–6] 

RIN 2050–AG31 

Definition of Solid Waste Public 

Meeting 

AGENCY: Environmental Protection 

Agency. 

ACTION: Definition of Solid Waste Notice 

of Public Meeting and Request for 

Comments. 

SUMMARY: The Environmental Protection 

Agency (EPA) is announcing a public 

meeting regarding the Agency’s recent 

regulation on the definition of solid 

waste under Subtitle C of the Resource 

Conservation and Recovery Act (RCRA). 

Specifically, EPA is currently reviewing 

a petition filed with the Administrator 

under RCRA section 7004(a) requesting 

that the Agency reconsider and repeal 

the recently promulgated revisions to 

the definition of solid waste for 

hazardous secondary materials being 

reclaimed, and is soliciting comments 

and information to assist the agency in 

evaluating the petition. EPA does not 

plan to repeal the rule, but is interested 

in receiving comments on possible 

revisions to the rule. Persons may 

register to speak at the public meeting 

or may submit written comments to the 

address below. 

DATES: The public meeting will be held 

on June 30, 2009, from 9 a.m. to 4:30 

p.m. The closing date for advance 

registration is June 23, 2009. Persons 

may also submit written or electronic 

comments by July 14, 2009 (see 

ADDRESSES). The administrative record 

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