Answer: The Minerals Management Service's (MMS) Royalty Management Program (RMP) has made substantial progress in Federal and Indian royalty management. A few of the major accomplishments since RMP inception in Fiscal Year (FY) 1982 are: Development and implementation of three major computer systems which account for bonuses, rents, royalties, and production; Collection and disbursement of over $37 billion in bonuses, rents, and royalties; Implementation of a major audit program which has resulted in over $400 million in additional royalty, interest, liquidated damages collections, and refund denials; Publication of final regulations in many program areas, including implementation of Federal Oil and Gas Royalty Management Act of 1982 (FOGRMA) and valuation of oil and gas; Establishment of the Royalty Management Advisory Committee (RMAC) Development of a comprehensive enforcement strategy for assessments Improvement of information to, and better cooperation and coordination with States and Indians. The MMS is working to improve the program in the following areas: Final regulations for coal valuation; Audit coverage of top royalty payors on a 6-year cycle; Onshore Federal and Indian lease conversion to the production System improvements to reduce reporting requirements on industry and to further improve information and speed payments to States and Indians. Question: regulations? What is the status of the Department's coal product value What kind of a process will you follow in developing the regulations to ensure that affected interests are involved in the process? When do you envision that the regulations will be finalized? Answer: The MMS published proposed product valuation regulations for coal on January 15, 1987, which included provision for a 90-day comment period. The comment period was reopened in July 1987, at which time MMS received an industry proposal outlining an alternate valuation approach. The comment period was then reopened for 60 days to allow time for interested parties to obtain copies of the alternative proposal and submit their comments to MMS. On November 17, 1987, MMS issued a notice of intent to issue a further notice of proposed rulemaking to give interested parties an opportunity to Comment on revised proposed regulations before proceeding with rulemaking. The MMS currently is evaluating comments received and discussing these comments with principal affected groups. final Affected interest groups have already been involved in the development of the coal product valuation regulations through the three comment periods on the proposed rules. In addition, MMS will conduct meetings with industry, States, and Indian tribes prior to publication of the proposed rules, scheduled for July 1988. The proposed rules will be open for comment again before publication of the final rules, which is tentatively scheduled for late 1988 or early 1989. Question: You have requested approximately $4.36 million be added to the Royalty budget in order to convert the remaining 95 percent of onshore operators to a centralized production accounting system. Please provide a breakdown of how the funds will be allocated. Answer: The $4.36 million request is for contract support to perform error correction and exception processing and for related systems and support costs, as detailed in the following table: Question: What system enhancements does the Bureau plan to undertake in FY 89 and how will these enhancements improve operations? Answer: Our FY 1989 system enhancement plans are nearing completion. Until the plan has been completed, specific improvements to be implemented will not be known. However, examples of projects under consideration include: improved RMP processing of industry reports; disbursement of audit payments prior to receipt of a royalty report; creation of a more efficient systems environment through database restructuring in lease, agreement. and key financial areas; accounting for royalty-in-kind (RIK) gas payments on nonstandard Indian leases; and development of an automated allowance and valuation monitoring system. We expect the larger projects dealing with the database and allowance and valuation monitoring will be implemented over several fiscal years. These projects could lead to improvements in the following areas: Erroneous exceptions and inappropriate billing actions will be reduced as tape and manual royalty reports will be combined prior to exception processing. Accounting and cash management will be improved because accepted Audit findings will be more completely documented on Auditing and Financial System (AFS) bills and disbursements to royalty recipients will be expedited. · Existing data relationships will be simplified which will permit RMP to take greater advantage of IBM software features and system capability. Database projects will also greatly enhance inquiry and reporting capability, provide a better foundation for a management information system, eliminate several manual and automated processes, improve data integrity and internal controls, and ease future system programming and maintenance tasks. Exception processing and product value determinations will improve when automated allowance and product valuation monitoring systems are developed. This in turn will expand lease coverage, improve staff productivity, encourage compliance, and generate additional revenues. Offshore Oil and Gas Leasing Program Question: Approximately $900,000 was added to the Environmental Studies portion of your budget in FY 1988 to accelerate research in specific geographic areas (Northern California, Washington-Oregon, and the Straits of Florida). Currently, 5 studies have been identified to accelerate. Please elaborate on the details of these studies. How much of the $900,000 has been obligated? Answer: The five studies that had been identified for acceleration are: O California Seabird Colony Catalog Survey of Commercially Important Fishes in Rocky Reef Habitats of O Field Study and Development of a Three Dimensional General The Impact of Oil and Gas Activities on Coral Reefs and Submerged Impacts of Oil and Gas Activities on the Aesthetics, Recreation, and As a result of the Secretary's decision to exclude the Straits of Florida from the 5-Year Schedule, the 3 Florida related studies are no longer being considered for acceleration, and have been replaced by the following studies: Potential Social and Economic Effects of OCS Oil and Gas Activities on Oregon and Washington Indian Tribes Inventory and Evaluation of Washington and Oregon Coastal Recreation o Washington, Oregon, and California OCS Fisheries Resource Database The "Fisheries Resource Database", has not been accelerated but received additional funding as a result of the budget increase. None of the $900,000 has been obligated as yet. We are in the process of developing the statements of work, outlining the full scope of the studies, as the first major step in the procurement process. Details on the 5 studies follow: 1. California Seabird Colony Catalog: This study will update the MMS funded 1979 survey of California seabird colonies and publish a new edition of the California Seabird Colony Catalog. The publication will provide the location, size, and species composition of seabird colonies along the California coast using surface and aerial surveys. Since some areas of the California coast are inaccessible, small plane and boat charters may be necessary to census areas. 2. Survey of Commercially Important Fishes in Rocky Reef Habitats off Washington and Oregon, Year 2: The objective of this study is to determine the role of rocky reef areas to the production of demersal fishes. Available literature on the ecology of demersal fishes in rocky reef areas will be reviewed and field sampling surveys using manned submersibles and remotely operated vehicles will record observations using video tape and still photography. This study will provide information on the composition, abundance and ecology of demersal communities and the life history of key species. 3. Potential Social and Economic Effects of OCS Oil and Gas Activities on Oregon and Washington Indian Tribes: This study will examine the existing economic base for selected Indian Tribes in the Pacific Northwest and the complex system of tribal fishing allotments. Also, the social environment of selected tribes will be described with emphasis on those social customs and mores which are most likely to be affected by introduction of industrial technology in isolated communities. Representatives from the Tribes will be invited to assist in the detailed design of the study. 4. Inventory and Evaluation of Washington and Oregon Coastal Recreation Resources: The goal of this study is to enable MMS to analyze the socioeconomic impact of OCS oil and gas activities on coastal recreation and tourism by establishing a data base on recreational areas and activities. Objectives include identification and description of Oregon and Washington coastal and offshore recreational activities, including sport fishing and boating, and their seasonal trends; and, determination of monetary value of a visitor day for each category of recreation activity and the daily per capita expenditures by coastal recreationists in the study area. This 5. Washington, Oregon, and California OCS Fisheries Resource Data Base: study (in its second year) will complement and expand the MMS's existing California OCS Fisheries Data Base to encompass fisheries data and resource mapping off Washington and Oregon. The goal is to develop a microcomputer capability to display and plot fisheries resource and economic information for Washington and Oregon while simultaneously overlaying such information with MMS information (e.g. lease blocks, platforms, petroleum resources, etc.) to allow for analysis of potential space and use conflicts and areas of resource concern. Question: Regarding additional funds for the Environmental Studies Program, I notice that 3 of the 5 projects and approximately $600,000 of the $900,000 has been devoted to accelerated studies in the Straits of Florida planning area. How will these funds be reallocated in light of the Secretary's recent decision to drop the Straits of Florida off the 5 Year Schedule? Given the fact that normal procurement procedures take approximately 6 months and there are only 5+ months remaining in the current fiscal year, will you be able to obligate the funds in this fiscal year? Answer: As a result of the Secretary's decision to drop the Straits of Florida off the 5 Year Schedule, the three Florida related studies are no longer being considered for acceleration, and have been replaced by the following studies: Potential Social and Economic Effects of OCS Oil and Gas Activities on Inventory and Evaluation of Washington and Oregon Coastal Recreation Washington, Oregon, and California OCS Fisheries Resource Database If we In recognition of the 6 months required to proceed through the competitive procurement process, we are investigating the possibility of pursuing cooperative agreements and/or interagency agreements which can be awarded before the end of this fiscal year. are unsuccessful in completing awards for all of the five projects in this fiscal year, we will forward fund other projects planned to continue in FY 1989 and use their programmed FY 1989 allocations to complete the awards for these studies early in FY 1989. Question: What is the status of the proposed Florida Task Force in light of the most recent deferrals offshore Florida? Answer: The issues which would have been the primary concerns of the task force have been resolved by the terms of the agreement between the Governor and the Secretary. Agreement was reached through consultation pursuant to the |