Source: https://www.federalregister.gov/articles/2011/12/08/2011-31496/agency-information-collection-activities-proposed-collection-comment-request
Timestamp: 2014-03-09 09:56:06
Document Index: 534572292

Matched Legal Cases: ['arts 1202', 'arts 1202', 'arts 202', 'arts 1202', '§ 1206', '§ 1206', 'art 1290', 'art 1212']

Dates: Submit written comments on or before January 9, 2012.
76 FR 76746
-76757 (12 pages)
Document Number: 2011-31496
Shorter URL: https://federalregister.gov/a/2011-31496 Regulations.gov Docket Info
30 CFR Parts 1202, 1206, & 1207, Indian Oil and Gas Valuation -- ICR 1012-0002 (formerly 1010-0103)
To comply with the Paperwork Reduction Act of 1995 (PRA), we are inviting comments on a collection of information requests that we will submit to the Office of Management and Budget (OMB) for review and approval. The OMB formerly approved this information collection request (ICR) under OMB Control Number 1010-0103. After the Secretary of the Department of the Interior established ONRR (the former Minerals Revenue Management, a program under the Minerals Management Service) on October 1, 2010, OMB approved a new series number for ONRR and renumbered our ICRs. This ICR covers the paperwork requirements in the regulations under title 30, Code of Federal Regulations (CFR), parts 1202, 1206, and 1207 (previously 30 CFR parts 202, 206, and 207). The revised title of this ICR is “30 CFR Parts 1202, 1206, and 1207, Indian Oil and Gas Valuation.” There are five forms associated with this information collection.
Submit written comments on or before January 9, 2012.
Abstract: The Secretary of the U.S. Department of the Interior is responsible for mineral resource development on Federal and Indian lands and the Outer Continental Shelf (OCS). The Secretary is required by various laws to manage mineral resource production on Federal and Indian lands and the OCS, collect the royalties and other mineral revenues due, and distribute the funds in accordance with those laws. Applicable laws pertaining to mineral leases on Federal and Indian lands and the OCS are posted on our Web site at http://www.onrr.gov/Laws_R_D/PublicLawsAMR.htm. The Secretary also has a trust responsibility to manage Indian lands and seek advice and information from Indian beneficiaries. The ONRR performs the minerals revenue management functions and assists the Secretary in carrying out the Department's trust responsibility for Indian lands. Indian Tribes and individual Indian mineral owners receive all royalties generated from their lands. Determining product valuation is essential to ensure that Indian Tribes and individual Indian mineral owners receive payment on the full value of the minerals removed from their lands. Failure to collect the data described in this information collection could result in the undervaluation of leased minerals on Indian lands.
We have not included in our estimates certain requirements performed in the normal course of business and considered usual and customary. The following chart shows the estimated burden hours by CFR section and paragraph: Respondents' Estimated Annual Burden Hours Back to Top
Standards for reporting and paying royalties Oil volumes are to be reported in barrels of clean oil of 42 standard U.S. gallons (231 cubic inches each) at 60 °F
How do I determine the volume of production for which I must pay royalty if my lease is not in an approved Federal unit or communitization agreement (AFA)?(b) You and all other persons paying royalties on the lease must report and pay royalties based on your takes
(c) You and all other persons paying royalties on the lease may ask ONRR for permission * * * to report entitlements
What standards do I use to report and pay royalties on gas?(a) You must report gas volumes as follows:
Transportation allowances—general (b)(2) Upon request of a lessee, ONRR may approve a transportation allowance deduction in excess of the limitation prescribed by paragraph (b)(1) of this section. * * * An application for exception (using Form MMS-4393, Request to Exceed Regulatory Allowance Limitation) must contain all relevant and supporting documentation necessary for ONRR to make a determination
Determination of transportation allowances (a) Arm's-length transportation contracts.
(1)(i) * * * The lessee shall have the burden of demonstrating that its contract is arm's-length
(1)(i) * * * Before any deduction may be taken, the lessee must submit a completed page one of Form MMS-4110 (and Schedule 1), Oil Transportation Allowance Report
(1)(iii) * * * When ONRR determines that the value of the transportation may be unreasonable, ONRR will notify the lessee and give the lessee an opportunity to provide written information justifying the lessee's transportation costs
(2)(i) * * * Except as provided in this paragraph, no allowance may be taken for the costs of transporting lease production which is not royalty-bearing without ONRR approval
(2)(ii) Notwithstanding the requirements of paragraph (i), the lessee may propose to ONRR a cost allocation method on the basis of the values of the products transported
(3) If an arm's-length transportation contract includes both gaseous and liquid products, and the transportation costs attributable to each product cannot be determined from the contract, the lessee shall propose an allocation procedure to ONRR. * * * The lessee shall submit all available data to support its proposal
(1) * * * A transportation allowance may be claimed retroactively for a period of not more than 3 months prior to the first day of the month that Form MMS-4110 is filed with ONRR, unless ONRR approves a longer period upon a showing of good cause by the lessee
(1) * * * When necessary or appropriate, ONRR may direct a lessee to modify its actual transportation allowance deduction
(2)(iv) * * * After a lessee has elected to use either method for a transportation system, the lessee may not later elect to change to the other alternative without approval of ONRR
(2)(iv)(A) * * * After an election is made, the lessee may not change methods without ONRR approval
(3)(i) * * * Except as provided in this paragraph, the lessee may not take an allowance for transporting lease production which is not royalty bearing without ONRR approval
(3)(ii) Notwithstanding the requirements of paragraph (i), the lessee may propose to ONRR a cost allocation method on the basis of the values of the products transported
(4) Where both gaseous and liquid products are transported through the same transportation system, the lessee shall propose a cost allocation procedure to ONRR. * * * The lessee shall submit all available data to support its proposal
(5) A lessee may apply to ONRR for an exception from the requirement that it compute actual costs in accordance with paragraphs (b)(1) through (b)(4) of this section
(1) Arm's-length contracts. (i) With the exception of those transportation allowances specified in paragraphs (c)(1)(v) and (c)(1)(vi) of this section, the lessee shall submit page one of the initial Form MMS-4110 (and Schedule 1), Oil Transportation Allowance Report, prior to, or at the same time as, the transportation allowance determined, under an arm's-length contract, is reported on Form MMS-2014, Report of Sales and Royalty Remittance
(1) Arm's-length contracts. (iii) After the initial reporting period and for succeeding reporting periods, lessees must submit page one of Form MMS-4110 (and Schedule 1) within 3 months after the end of the calendar year, or after the applicable contract or rate terminates or is modified or amended, whichever is earlier, unless ONRR approves a longer period (during which period the lessee shall continue to use the allowance from the previous reporting period)
(1) Arm's-length contracts. (iv) ONRR may require that a lessee submit arm's-length transportation contracts, production agreements, operating agreements, and related documents. Documents shall be submitted within a reasonable time, as determined by ONRR
(i) With the exception of those transportation allowances specified in paragraphs (c)(2)(v), (c)(2)(vii) and (c)(2)(viii) of this section, the lessee shall submit an initial Form MMS-4110 prior to, or at the same time as, the transportation allowance determined under a non-arm's-length contract or no-contract situation is reported on Form MMS-2014. * * * The initial report may be based upon estimated costs
(iii) For calendar-year reporting periods succeeding the initial reporting period, the lessee shall submit a completed Form MMS-4110 containing the actual costs for the previous reporting period. If oil transportation is continuing, the lessee shall include on Form MMS-4110 its estimated costs for the next calendar year. * * * ONRR must receive the Form MMS-4110 within 3 months after the end of the previous reporting period, unless ONRR approves a longer period (during which period the lessee shall continue to use the allowance from the previous reporting period)
(iv) For new transportation facilities or arrangements, the lessee's initial Form MMS-4110 shall include estimates of the allowable oil transportation costs for the applicable period
(v) * * * only those allowances that have been approved by ONRR in writing
(vi) Upon request by ONRR, the lessee shall submit all data used to prepare its Form MMS-4110. The data shall be provided within a reasonable period of time, as determined by ONRR
(4) Transportation allowances must be reported as a separate line item on Form MMS-2014
(2)For lessees transporting production from Indian leases, the lessee must submit a corrected Form MMS-2014 to reflect actual costs
May I ask ONRR for valuation guidance?You may ask ONRR for guidance in determining value. You may propose a value method to ONRR. Submit all available data related to your proposal and any additional information ONRR deems necessary
What records must I keep and produce?(a) On request, you must make available sales, volume, and transportation data for production you sold, purchased, or obtained from the field or area. You must make this data available to ONRR, Indian representatives, or other authorized persons
(b) You must retain all data relevant to the determination of royalty value
How do I value gas produced from leases in an index zone?(b) Valuing residue gas and gas before processing.
(1)(ii) Gas production that you certify on Form MMS-4410 * * * is not processed before it flows into a pipeline with an index but which may be processed later
(6)(i) You must report the safety net price for each index zone to ONRR on Form MMS-4411, Safety Net Report, no later than June 30 following each calendar year;
(iii) ONRR may order you to amend your safety net price within one year from the date your Form MMS-4411 is due or is filed, whichever is later
(6)(ii) You must pay and report on Form MMS-2014 additional royalties due no later than June 30 following each calendar year
(f ) Excluding some or all Tribal leases from valuation under this section
(1) An Indian Tribe may ask ONRR to exclude some or all of its leases from valuation under this section
(ii) If an Indian Tribe requests exclusion from an index zone for less than all of its leases, ONRR will approve the request only if the excluded leases may be segregated into one or more groups based on separate fields within the reservation
(2) An Indian Tribe may ask ONRR S to terminate exclusion of its leases from valuation under this section
(3) The Indian Tribe's request to ONRR under either paragraph (f)(1) or (2) of this section must be in the form of a Tribal resolution
How do I calculate the alternative methodology for dual accounting?(a) Electing a dual accounting method.
(1) * * * You may elect to perform the dual accounting calculation according to either § 1206.176(a) (called actual dual accounting), or paragraph (b) of this section (called the alternative methodology for dual accounting)
(2) You must make a separate election to use the alternative methodology for dual accounting for your Indian leases in each ONRR S-designated area
How do I value gas production when an index-based method cannot be used?(a) Situations in which an index-based method cannot be used
(4)(ii) If the major portion value is higher, you must submit an amended Form MMS-2014 to ONRR by the due date specified in the written notice from ONRR of the major portion value
1206.174 (b)(1)(i) and (iii); (b)(2); (d)(2)
(b) Arm's-length contracts
(1)(i) You have the burden of demonstrating that your contract is arm's-length
(iii) * * * In these circumstances, ONRR will notify you and give you an opportunity to provide written information justifying your value
(2) ONRR may require you to certify that your arm's-length contract provisions include all of the consideration the buyer pays, either directly or indirectly, for the gas, residue gas, or gas plant product
(2) You must make all such data available upon request to the authorized ONRR or Indian representatives, to the Office of the Inspector General of the Department, or other authorized persons
(d) Supporting data. If you determine the value of production under paragraph (c) of this section, you must retain all data relevant to determination of royalty value
(f) Value guidance. You may ask ONRR for guidance in determining value. You may propose a valuation method to ONRR. Submit all available data related to your proposal and any additional information ONRR deems necessary
How do I determine quantities and qualities of production for computing royalties?(d)(4) You may request ONRR approval of other methods for determining the quantity of residue gas and gas plant products allocable to each lease
How do I perform accounting for comparison?(b) If you are required to account for comparison, you may elect to use the alternative dual accounting methodology provided for in § 1206.173 instead of the provisions in paragraph (a) of this section
(c) * * * If you do not perform dual accounting, you must certify to ONRR that gas flows into such a pipeline before it is processed
What general requirements regarding transportation allowances apply to me?(c)(2) If you ask ONRR, ONRR may approve a transportation allowance deduction in excess of the limitation in paragraph (c)(1) of this section
(3) Your application for exception (using Form MMS-4393, Request to Exceed Regulatory Allowance Limitation) must contain all relevant and supporting documentation necessary for ONRR to make a determination
How do I determine a transportation allowance?(a) Determining a transportation allowance under an arm's-length contract
(1)(i) * * * You are required to submit to ONRR a copy of your arm's-length transportation contract(s) and all subsequent amendments to the contract(s) within 2 months of the date ONRR receives your report which claims the allowance on the Form MMS-2014
(1)(iii) If ONRR determines that the consideration paid under an arm's-length transportation contract does not reflect the value of the transportation because of misconduct by or between the contracting parties * * * In these circumstances, ONRR will notify you and give you an opportunity to provide written information justifying your transportation costs
(2)(i) * * * you cannot take an allowance for the costs of transporting lease production that is not royalty bearing without ONRR approval, or without lessor approval on Tribal leases
(ii) As an alternative to paragraph (a)(2)(i) of this section, you may propose to ONRR a cost allocation method based on the values of the products transported
(3)(i) If your arm's-length transportation contract includes both gaseous and liquid products and the transportation costs attributable to each cannot be determined from the contract, you must propose an allocation procedure to ONRR
(ii) You are required to submit all relevant data to support your allocation proposal
(1)(ii) * * * You must submit the actual cost information to support the allowance to ONRR on Form MMS-4295, Gas Transportation Allowance Report, within 3 months after the end of the 12-month period to which the allowance applies
(2)(iv) You may use either depreciation with a return on undepreciated capital investment or a return on depreciable capital investment. * * * you may not later elect to change to the other alternative without ONRR approval
(2)(iv)(A) * * * Once you make an election, you may not change methods without ONRR approval
(3)(i) * * * Except as provided in this paragraph, you may not take an allowance for transporting a product that is not royalty bearing without ONRR approval
(3)(ii) As an alternative to the requirements of paragraph (b)(3)(i) of this section, you may propose to ONRR a cost allocation method based on the values of the products transported
(5) If you transport both gaseous and liquid products through the same transportation system, you must propose a cost allocation procedure to ONRR. * * * You are required to submit all relevant data to support your proposal
(d) Reporting your transportation allowance
(1) If ONRR requests, you must submit all data used to determine your transportation allowance
(2) You must report transportation allowances as a separate entry on Form MMS-2014
(e) Adjusting incorrect allowances. If for any month the transportation allowance you are entitled to is less than the amount you took on Form MMS-2014, you are required to report and pay additional royalties due, plus interest computed under 30 CFR 1218.54 from the first day of the first month you deducted the improper transportation allowance until the date you pay the royalties due
(f) Determining allowable costs for transportation allowances
(1) Firm demand charges paid to pipelines.* * * You must modify the Form MMS-2014 by the amount received or credited for the affected reporting period
How do I determine an actual processing allowance?(a) Determining a processing allowance if you have an arm's-length processing contract
(1)(i) * * * You have the burden of demonstrating that your contract is arm's-length. You are required to submit to ONRR a copy of your arm's-length contract(s) and all subsequent amendments to the contract(s) within 2 months of the date ONRR receives your first report that deducts the allowance on the Form MMS-2014
(1)(iii) If ONRR determines that the consideration paid under an arm's-length processing contract does not reflect the value of the processing because of misconduct by or between the contracting parties * * * In these circumstances, ONRR will notify you and give you an opportunity to provide written information justifying your processing costs
(3) If your arm's-length processing contract includes more than one gas plant product and the processing costs attributable to each product cannot be determined from the contract, you must propose an allocation procedure to ONRR. * * * You are required to submit all relevant data to support your proposal
(1)(ii) * * * You must submit the actual cost information to support the allowance to ONRR on Form MMS-4109, Gas Processing Allowance Summary Report, within 3 months after the end of the 12-month period for which the allowance applies
(2)(iv) You may use either depreciation with a return on undepreciable capital investment or a return on depreciable capital investment. * * * you may not later elect to change to the other alternative without ONRR approval
(3) Your processing allowance under this paragraph (b) must be determined based upon a calendar year or other period if you and ONRR agree to an alternative
(c) Reporting your processing allowance
(1) If ONRR requests, you must submit all data used to determine your processing allowance
(2) You must report gas processing allowances as a separate entry on the Form MMS-2014 * * *
(d) Adjusting incorrect processing allowances. If for any month the gas processing allowance you are entitled to is less than the amount you took on Form MMS-2014, you are required to pay additional royalties, plus interest computed under 30 CFR 1218.54 from the first day of the first month you deducted a processing allowance until the date you pay the royalties due
How do I establish processing costs for dual accounting purposes when I do not process the gas?(c) A proposed comparable processing fee submitted to either the Tribe and ONRR (for Tribal leases) or ONRR (for allotted leases) with your supporting documentation submitted to ONRR. If ONRR does not take action on your proposal within 120 days, the proposal will be deemed to be denied and subject to appeal to the ONRR Director under 30 CFR part 1290
Contracts made pursuant to old form leases (b) The stipulation, the substance of which must be included in the contract, or be made the subject matter of a separate instrument properly identifying the leases affected thereby, is as follows
Contract and sales agreement retention Copies of all sales contracts, posted price bulletins, etc., and copies of all agreements, other contracts, or other documents which are relevant to the valuation of production are to be maintained by the lessee and made available upon request during normal working hours to authorized ONRR, State or Indian representatives, other ONRR or BLM officials, auditors of the General Accounting Office, or other persons authorized to receive such documents, or shall be submitted to ONRR within a reasonable period of time, as determined by ONRR. Any oral sales arrangement negotiated by the lessee must be placed in written form and retained by the lessee. Records shall be retained in accordance with 30 CFR part 1212
Public Comment Policy: We will post all comments, including names and addresses of respondents, at http://regulations.gov. Before including your address, phone number, email address, or other personal identifying information in your comment, be advised that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold from public view your personal identifying information, we cannot guarantee that we will be able to do so.
[FR Doc. 2011-31496 Filed 12-7-11; 8:45 am]