FOR RELEASE: February 8, 1996               CONTACT: Tom DeRocco
                                            (202) 208-3985
                                            Michael L. Baugher
                                            (303) 231-3162

Innovation 5:

MMS ELIMINATES MORE PAPERWORK FOR INDUSTRY 

The U.S. Department of the Interior's Minerals Management
Service (MMS) announced today that it is eliminating several 
transportation and processing allowance forms required of 
companies operating federal mineral leases, and removing 
sanctions that had been imposed when companies failed to 
observe reporting procedures in filing those forms.  The final 
rule will be published in the February 12, 1996, Federal Register.

"Under the new regulation," said MMS Director Cynthia
Quarterman, "companies will still be required to report actual 
allowances taken, but they'll be subject to more reasonable 
sanctions for improper reporting.  It's a significant change with 
savings estimated at $500,000 a year from forms processing 
and billing which are no longer required.

"The earlier rule was onerous, requiring companies to report
an estimated allowance or lose the entire allowance regardless 
of whether their actual payment was correct and the allowance 
appropriate," declared Quarterman.  "This rule caps any sanction 
at $250 for improperly netting allowances against royalty.  We'll 
employ audits to ensure that allowance deductions taken by 
lessees are proper."

Quarterman said MMS' Allowance Study Group, comprised of
representatives from the Council of Petroleum Accounting 
Societies (COPAS), the State and Tribal Royalty Audit Committee, 
and MMS, has been looking at regulatory requirements and 
practices of MMS related to transportation and processing 
allowances since the Administration unveiled its "reinventing 
government" initiative.   

"This streamlining is another example of MMS working with
its customers so government works better and costs less," 
she said.  "As we work with constituents and stakeholders, 
I believe we'll see changes coming more quickly as everyone 
recognizes the improvements being implemented.  They build 
one on top of the other."

Allowance reporting requirements on Indian leases will
remain unchanged by the new rule.  "We've established 
a negotiated rule-making committee comprised of 
representatives of Indian lessors and industry to examine 
valuation of Indian production," she said. "Their report is 
expected this spring, so we'll defer any rulemaking on 
Indian leases until then." 

MMS is the federal agency that manages the Nation's natural
gas, oil and other mineral resources on the Outer Continental 
Shelf, and collects, accounts for and disburses about $4 billion 
yearly in revenues from offshore federal mineral leases and 
from onshore mineral leases on federal and Indian lands.

--MMS--

EDITOR'S NOTE: MMS's home page address on the Internet: 
[http://www.mms.gov].