30 U.S.C. § 1724 — Secretarial and delegated States’ actions

Page 372 TITLE 30—MINERAL LANDS AND MINING § 1723 may bring a civil action in a district court of the United States, which shall have jurisdiction over such actions— (1) to restrain any violation of this chapter; or (2) to compel the taking of any action re- quired by or under this chapter or any mineral leasing law of the United States. (b) Venue A civil action described in subsection (a) may be brought only in the United States district court for the judicial district wherein the act, omission, or transaction constituting a viola- tion under this chapter or any other mineral leasing law occurred, or wherein the defendant is found or transacts business. (Pub. L. 97–451, title I, § 112, Jan. 12, 1983, 96 Stat. 2456.) § 1723. Rewards Where amounts representing royalty or other payments owed to the United States with re- spect to any oil and gas lease on Federal lands or the Outer Continental Shelf are recovered pursuant to any action taken by the Secretary under this chapter as a result of information provided to the Secretary by any person, the Secretary is authorized to pay to such person an amount equal to not more than 10 percent of such recovered amounts. The preceding sentence shall not apply to information provided by an officer or employee of the United States, an offi- cer or employee of a State or Indian tribe acting pursuant to a cooperative agreement or delega- tion under this chapter, or any person acting pursuant to a contract authorized by this chap- ter. (Pub. L. 97–451, title I, § 113, Jan. 12, 1983, 96 Stat. 2456.) § 1724. Secretarial and delegated States’ actions and limitation periods (a) In general The respective duties, responsibilities, and ac- tivities with respect to a lease shall be per- formed by the Secretary, delegated States, and lessees or their designees in a timely manner. (b) Limitation period (1) In general A judicial proceeding or demand which arises from, or relates to an obligation, shall be commenced within seven years from the date on which the obligation becomes due and if not so commenced shall be barred. If com- mencement of a judicial proceeding or demand for an obligation is barred by this section, the Secretary, a delegated State, or a lessee or its designee (A) shall not take any other or fur- ther action regarding that obligation, includ- ing (but not limited to) the issuance of any order, request, demand or other communica- tion seeking any document, accounting, deter- mination, calculation, recalculation, payment, principal, interest, assessment, or penalty or the initiation, pursuit or completion of an audit with respect to that obligation; and (B) shall not pursue any other equitable or legal remedy, whether under statute or common law, with respect to an action on or an en- forcement of said obligation. (2) Rule of construction A judicial proceeding or demand that is timely commenced under paragraph (1) against a designee shall be considered timely commenced as to any lessee who is liable pur- suant to section 1712(a) of this title for the ob- ligation that is the subject of the judicial pro- ceeding or demand. (3) Application of certain limitations The limitations set forth in sections 2401, 2415, 2416, and 2462 of title 28 and section 226–2 of this title shall not apply to any obligation to which this chapter applies. Section 3716 of title 31 may be applied to an obligation the en- forcement of which is not barred by this chap- ter, but may not be applied to any obligation the enforcement of which is barred by this chapter. (c) Obligation becomes due (1) In general For purposes of this chapter, an obligation becomes due when the right to enforce the ob- ligation is fixed. (2) Royalty obligations The right to enforce any royalty obligation for any given production month for a lease is fixed for purposes of this chapter on the last day of the calendar month following the month in which oil or gas is produced. (d) Tolling of limitation period The running of the limitation period under subsection (b) shall not be suspended, tolled, ex- tended, or enlarged for any obligation for any reason by any action, including an action by the Secretary or a delegated State, other than the following: (1) Tolling agreement A written agreement executed during the limitation period between the Secretary or a delegated State and a lessee or its designee (with notice to the lessee who designated the designee) shall toll the limitation period for the amount of time during which the agree- ment is in effect. (2) Subpoena (A) The issuance of a subpoena to a lessee or its designee (with notice to the lessee who des- ignated the designee, which notice shall not constitute a subpoena to the lessee) in accord- ance with the provisions of subparagraph (B)(i) shall toll the limitation period with respect to the obligation which is the subject of a sub- poena only for the period beginning on the date the lessee or its designee receives the subpoena and ending on the date on which (i) the lessee or its designee has produced such subpoenaed records for the subject obligation, (ii) the Secretary or a delegated State receives written notice that the subpoenaed records for the subject obligation are not in existence or are not in the lessee’s or its designee’s posses- sion or control, or (iii) a court has determined in a final decision that such records are not Page 373 TITLE 30—MINERAL LANDS AND MINING § 1724 required to be produced, whichever occurs first. (B)(i) A subpoena for the purposes of this section which requires a lessee or its designee to produce records necessary to determine the proper reporting and payment of an obligation due the Secretary may be issued only by an Assistant Secretary of the Interior or an Act- ing Assistant Secretary of the Interior who is a schedule C employee (as defined by section 213.3301 of title 5, Code of Federal Regula- tions), or the Director or Acting Director of the respective bureau or agency, and may not be delegated to any other person. If a State has been delegated authority pursuant to sec- tion 1735 of this title, the State, acting through the highest State official having ulti- mate authority over the collection of royalties from leases on Federal lands within the State, may issue such subpoena, but may not dele- gate such authority to any other person. (ii) A subpoena described in clause (i) may only be issued against a lessee or its designee during the limitation period provided in this section and only after the Secretary or a dele- gated State has in writing requested the records from the lessee or its designee related to the obligation which is the subject of the subpoena and has determined that— (I) the lessee or its designee has failed to respond within a reasonable period of time to the Secretary’s or the applicable dele- gated State’s written request for such records necessary for an audit, investigation or other inquiry made in accordance with the Secretary’s or such delegated State’s re- sponsibilities under this chapter; or (II) the lessee or its designee has in writ- ing denied the Secretary’s or the applicable delegated State’s written request to produce such records in the lessee’s or its designee’s possession or control necessary for an audit, investigation or other inquiry made in ac- cordance with the Secretary’s or such dele- gated State’s responsibilities under this chapter; or (III) the lessee or its designee has unrea- sonably delayed in producing records nec- essary for an audit, investigation or other inquiry made in accordance with the Sec- retary’s or the applicable delegated State’s responsibilities under this chapter after the Secretary’s or delegated State’s written re- quest. (C) In seeking records, the Secretary or the applicable delegated State shall afford the les- see or its designee a reasonable period of time after a written request by the Secretary or such delegated State in which to provide such records prior to the issuance of any subpoena. (3) Misrepresentation or concealment The intentional misrepresentation or con- cealment of a material fact for the purpose of evading the payment of an obligation in which case the limitation period shall be tolled for the period of such misrepresentation or such concealment. (4) Order to perform restructured accounting (A)(i) The issuance of a notice under sub- paragraph (D) that the lessee or its designee has not substantially complied with the re- quirement to perform a restructured account- ing shall toll the limitation period with re- spect to the obligation which is the subject of the notice only for the period beginning on the date the lessee or its designee receives the no- tice and ending 120 days after the date on which (I) the Secretary or the applicable dele- gated State receives written notice that the accounting or other requirement has been per- formed, or (II) a court has determined in a final decision that the lessee is not required to perform the accounting, whichever occurs first. (ii) If the lessee or its designee initiates an administrative appeal or judicial proceeding to contest an order to perform a restructured accounting issued under subparagraph (B)(i), the limitation period in subsection (b) shall be tolled from the date the lessee or its designee received the order until a final, nonappealable decision is issued in any such proceeding. (B)(i) The Secretary or the applicable dele- gated State may issue an order to perform a restructured accounting to a lessee or its des- ignee when the Secretary or such delegated State determines during an audit of a lessee or its designee that the lessee or its designee should recalculate royalty due on an obliga- tion based upon the Secretary’s or the dele- gated State’s finding that the lessee or its des- ignee has made identified underpayments or overpayments which are demonstrated by the Secretary or the delegated State to be based upon repeated, systemic reporting errors for a significant number of leases or a single lease for a significant number of reporting months with the same type of error which constitutes a pattern of violations and which are likely to result in either significant underpayments or overpayments. (ii) The power of the Secretary to issue an order to perform a restructured accounting may not be delegated below the most senior career professional position having responsi- bility for the royalty management program, which position is currently designated as the ‘‘Associate Director for Royalty Manage- ment’’, and may not be delegated to any other person. If a State has been delegated authority pursuant to section 1735 of this title, the State, acting through the highest ranking State official having ultimate authority over the collection of royalties from leases on Fed- eral lands within the State, may issue such order to perform, which may not be delegated to any other person. An order to perform a re- structured accounting shall— (I) be issued within a reasonable period of time from when the audit identifies the sys- temic, reporting errors; (II) specify the reasons and factual bases for such order; (III) be specifically identified as an ‘‘order to perform a restructured accounting’’; (IV) provide the lessee or its designee a reasonable period of time (but not less than 60 days) within which to perform the re- structured accounting; and (V) provide the lessee or its designee 60 days within which to file an administrative Page 374 TITLE 30—MINERAL LANDS AND MINING § 1724 appeal of the order to perform a restructured accounting. (C) An order to perform a restructured ac- counting shall not mean or be construed to in- clude any other action by or on behalf of the Secretary or a delegated State. (D) If a lessee or its designee fails to sub- stantially comply with the requirement to perform a restructured accounting pursuant to this subsection, a notice shall be issued to the lessee or its designee that the lessee or its des- ignee has not substantially complied with the requirements to perform a restructured ac- counting. A lessee or its designee shall be given a reasonable time within which to per- form the restructured accounting. Such notice may be issued under this section only by an Assistant Secretary of the Interior or an act- ing Assistant Secretary of the Interior who is a schedule C employee (as defined by section 213.3301 of title 5, Code of Federal Regulations) and may not be delegated to any other person. If a State has been delegated authority pursu- ant to section 1735 of this title, the State, act- ing through the highest State official having ultimate authority over the collection of roy- alties from leases on Federal lands within the State, may issue such notice, which may not be delegated to any other person. (e) Termination of limitations period An action or an enforcement of an obligation by the Secretary or delegated State or a lessee or its designee shall be barred under this section prior to the running of the seven-year period provided in subsection (b) in the event— (1) the Secretary or a delegated State has notified the lessee or its designee in writing that a time period is closed to further audit; or (2) the Secretary or a delegated State and a lessee or its designee have so agreed in writ- ing. For purposes of this subsection, notice to, or an agreement by, the designee shall be binding on any lessee who is liable pursuant to section 1712(a) of this title for obligations that are the subject of the notice or agreement. (f) Records required for determining collections Records required pursuant to section 1713 of this title by the Secretary or any delegated State for the purpose of determining obligations due and compliance with any applicable mineral leasing law, lease provision, regulation or order with respect to oil and gas leases from Federal lands or the Outer Continental Shelf shall be maintained for the same period of time during which a judicial proceeding or demand may be commenced under subsection (b). If a judicial proceeding or demand is timely commenced, the record holder shall maintain such records until the final nonappealable decision in such judicial proceeding is made, or with respect to that de- mand is rendered, unless the Secretary or the applicable delegated State authorizes in writing an earlier release of the requirement to main- tain such records. Notwithstanding anything herein to the contrary, under no circumstance shall a record holder be required to maintain or produce any record relating to an obligation for any time period which is barred by the applica- ble limitation in this section. In connection with any hearing, administrative proceeding, in- quiry, investigation, or audit by the Secretary or a delegated State under this chapter, the Sec- retary or the delegated State shall minimize the submission of multiple or redundant informa- tion and make a good faith effort to locate records previously submitted by a lessee or a designee to the Secretary or the delegated State, prior to requiring the lessee or the des- ignee to provide such records. (g) Timely collections In order to most effectively utilize resources available to the Secretary to maximize the col- lection of oil and gas receipts from lease obliga- tions to the Treasury within the seven-year pe- riod of limitations, and consequently to maxi- mize the State share of such receipts, the Sec- retary should not perform or require account- ing, reporting, or audit activities if the Sec- retary and the State concerned determine that the cost of conducting or requiring the activity exceeds the expected amount to be collected by the activity, based on the most current 12 months of activity. This subsection shall not provide a defense to a demand or an order to perform a restructured accounting. To the max- imum extent possible, the Secretary and dele- gated States shall reduce costs to the United States Treasury and the States by discontinuing requirements for unnecessary or duplicative data and other information, such as separate al- lowances and payor information, relating to ob- ligations due. If the Secretary and the State concerned determine that collection will result sooner, the Secretary or the applicable dele- gated State may waive or forego interest in whole or in part. (h) Appeals and final agency action (1) 33-month period Demands or orders issued by the Secretary or a delegated State are subject to administra- tive appeal in accordance with the regulations of the Secretary. No State shall impose any conditions which would hinder a lessee’s or its designee’s immediate appeal of an order to the Secretary or the Secretary’s designee. The Secretary shall issue a final decision in any administrative proceeding, including any ad- ministrative proceedings pending on August 13, 1996, within 33 months from the date such proceeding was commenced or 33 months from August 13, 1996, whichever is later. The 33- month period may be extended by any period of time agreed upon in writing by the Sec- retary and the appellant. (2) Effect of failure to issue decision If no such decision has been issued by the Secretary within the 33-month period referred to in paragraph (1)— (A) the Secretary shall be deemed to have issued and granted a decision in favor of the appellant as to any nonmonetary obligation and any monetary obligation the principal amount of which is less than $10,000; and (B) the Secretary shall be deemed to have issued a final decision in favor of the Sec- retary, which decision shall be deemed to af- Page 375 TITLE 30—MINERAL LANDS AND MINING § 1726 firm those issues for which the agency ren- dered a decision prior to the end of such pe- riod, as to any monetary obligation the prin- cipal amount of which is $10,000 or more, and the appellant shall have a right to judicial review of such deemed final decision in ac- cordance with title 5. (i) Collections of disputed amounts due To expedite collections relating to disputed obligations due within the seven-year period be- ginning on the date the obligation became due, the parties shall hold not less than one settle- ment consultation and the Secretary and the State concerned may take such action as is ap- propriate to compromise and settle a disputed obligation, including waiving or reducing inter- est and allowing offsetting of obligations among leases. (j) Enforcement of claim for judicial review In the event a demand subject to this section is properly and timely commenced, the obliga- tion which is the subject of the demand may be enforced beyond the seven-year limitations pe- riod without being barred by this statute of lim- itations. In the event a demand subject to this section is properly and timely commenced, a ju- dicial proceeding challenging the final agency action with respect to such demand shall be deemed timely so long as such judicial pro- ceeding is commenced within 180 days from re- ceipt of notice by the lessee or its designee of the final agency action. (k) Implementation of final decision In the event a judicial proceeding or demand subject to this section is timely commenced and thereafter the limitation period in this section lapses during the pendency of such proceeding, any party to such proceeding shall not be barred from taking such action as is required or nec- essary to implement a final unappealable judi- cial or administrative decision, including any action required or necessary to implement such decision by the recovery or recoupment of an underpayment or overpayment by means of re- fund or credit. (l) Stay of payment obligation pending review Any person ordered by the Secretary or a dele- gated State to pay any obligation (other than an assessment) shall be entitled to a stay of such payment without bond or other surety instru- ment pending an administrative or judicial pro- ceeding if the person periodically demonstrates to the satisfaction of the Secretary that such person is financially solvent or otherwise able to pay the obligation. In the event the person is not able to so demonstrate, the Secretary may require a bond or other surety instrument satis- factory to cover the obligation. Any person or- dered by the Secretary or a delegated State to pay an assessment shall be entitled to a stay without bond or other surety instrument. (Pub. L. 97–451, title I, § 115, as added Pub. L. 104–185, § 4(a), Aug. 13, 1996, 110 Stat. 1704; amend- ed Pub. L. 104–200, § 1(2), Sept. 22, 1996, 110 Stat. 2421.) Editorial Notes CODIFICATION Pub. L. 104–185, § 4(a), which directed the addition of this section after section 114 of the Federal Oil and Gas Royalty Management Act of 1982, Pub. L. 97–451, was executed by adding this section after section 113 to re- flect the probable intent of Congress because Pub. L. 97–451 did not contain a section 114. AMENDMENTS 1996—Subsec. (l). Pub. L. 104–200 inserted ‘‘so’’ after ‘‘the person is not able to’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section applicable with respect to production of oil and gas after the first day of the month following Aug. 13, 1996, except as provided by subsec. (h) of this sec- tion, see section 11 of Pub. L. 104–185, set out as an Ef- fective Date of 1996 Amendment note under section 1701 of this title. APPLICABILITY Section not applicable to any privately owned min- erals or with respect to Indian lands, see sections 9 and 10 of Pub. L. 104–185, set out as an Applicability of 1996 Amendment note under section 1701 of this title. § 1725. Assessments Beginning eighteen months after August 13, 1996, to encourage proper royalty payment the Secretary or the delegated State shall impose assessments on a person who chronically sub- mits erroneous reports under this chapter. As- sessments under this chapter may only be issued as provided for in this section. (Pub. L. 97–451, title I, § 116, as added Pub. L. 104–185, § 6(f)(1), Aug. 13, 1996, 110 Stat. 1714.) Editorial Notes CODIFICATION Pub. L. 104–185, § 4(a), which directed the addition of this section at the end of the Federal Oil and Gas Roy- alty Management Act of 1982, was executed by adding this section at the end of title I of that Act to reflect the probable intent of Congress. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section applicable with respect to production of oil and gas after the first day of the month following Aug. 13, 1996, see section 11 of Pub. L. 104–185, set out as an Effective Date of 1996 Amendment note under section 1701 of this title. APPLICABILITY Section not applicable to any privately owned min- erals or with respect to Indian lands, see sections 9 and 10 of Pub. L. 104–185, set out as an Applicability of 1996 Amendment note under section 1701 of this title. § 1726. Alternatives for marginal properties (a) Determination of best interests of State con- cerned and United States The Secretary and the State concerned, acting in the best interests of the United States and the State concerned to promote production, re- duce administrative costs, and increase net re- ceipts to the United States and the States, shall