30 U.S.C. § 1721 — Royalty terms and conditions, interest,

Page 368 TITLE 30—MINERAL LANDS AND MINING § 1720 1 So in original. Probably should not be capitalized. 2 See References in Text note below. Secretary has prescribed for such a hearing and who is aggrieved by a final order of the Sec- retary under this section may seek review of such order in the United States district court for the judicial district in which the violation allegedly took place. Review by the district court shall be only on the administrative record and not de novo. Such an action shall be barred unless filed within 90 days after the Secretary’s final order. (k) Failure to pay penalty If any person fails to pay an assessment of a civil penalty under this chapter— (1) after the order making the assessment has become a final order and if such person does not file a petition for judicial review of the order in accordance with subsection (j), or (2) after a court in an action brought under subsection (j) has entered a final judgment in favor of the Secretary, the court shall have jurisdiction to award the amount assessed plus interest from the date of the expiration of the 90-day period referred to in subsection (j). Judgment by the court shall in- clude an order to pay. (l) Nonliability for leases automatically termi- nated No person shall be liable for a civil penalty under subsection (a) or (b) for failure to pay any rental for any lease automatically terminated pursuant to section 188 of this title. (Pub. L. 97–451, title I, § 109, Jan. 12, 1983, 96 Stat. 2454.) Editorial Notes REFERENCES IN TEXT Section 1712(a) of this title, referred to in subsec. (a)(2), was amended generally by Pub. L. 104–185, § 6(g), Aug. 13, 1996, 110 Stat. 1715, and, as so amended, no longer contains a par. (2). See section 1712(a) of this title. § 1720. Criminal penalties Any person who commits an act for which a civil penalty is provided in section 1719(d) of this title shall, upon conviction, be punished by a fine of not more than $50,000, or by imprison- ment for not more than 2 years, or both. (Pub. L. 97–451, title I, § 110, Jan. 12, 1983, 96 Stat. 2455.) § 1720a. Applicability of civil and criminal pen- alties to various uses of Federal or Indian lands and Outer Continental Shelf Notwithstanding any other provision of law, Sections 1 1719 and 1720 2 of this title shall, for fiscal year 2010 and each fiscal year thereafter, apply to any lease authorizing exploration for or development of coal, any other solid mineral, or any geothermal resource on any Federal or In- dian lands and any lease, easement, right of way, or other agreement, regardless of form, for use of the Outer Continental Shelf or any of its resources under sections 1337(k) and 1337(p) of title 43 to the same extent as if such lease, ease- ment, right of way, or other agreement, regard- less of form, were an oil and gas lease, except that in such cases the term ‘‘royalty payment’’ shall include any payment required by such lease, easement, right of way or other agree- ment, regardless of form, or by applicable regu- lation. (Pub. L. 111–88, div. A, title I, § 114, Oct. 30, 2009, 123 Stat. 2928.) Editorial Notes REFERENCES IN TEXT Sections 1719 and 1720 of this title, referred to in text, was in the original ‘‘Sections 109 and 110 of the Federal Oil and Gas Royalty Management Act’’ and was trans- lated as meaning sections 109 and 110 of the Federal Oil and Gas Royalty Management Act of 1982, to reflect the probable intent of Congress. CODIFICATION Section was enacted as part of the Department of the Interior, Environment, and Related Agencies Appro- priations Act, 2010, and not as part of the Federal Oil and Gas Royalty Management Act of 1982 which com- prises this chapter. § 1721. Royalty terms and conditions, interest, and penalties (a) Charge on late royalty payment or royalty payment deficiency In the case of oil and gas leases where royalty payments are not received by the Secretary on the date that such payments are due, or are less than the amount due, the Secretary shall charge interest on such late payments or underpay- ments at the rate applicable under section 6621 of title 26. In the case of an underpayment or partial payment, interest shall be computed and charged only on the amount of the deficiency and not on the total amount due. (b) Charge on late payment made by Secretary to States Any payment made by the Secretary to a State under section 191 of this title and any other payment made by the Secretary to a State from any oil or gas royalty received by the Sec- retary which is not paid on the date required under section 191 of this title shall include an interest charge computed at the rate applicable under section 6621 of title 26. (c) Deposit in royalty accounts of charges on roy- alties due and owing Indians All interest charges collected under this chap- ter or under other applicable laws because of nonpayment, late payment or underpayment of royalties due and owing an Indian tribe or an In- dian allottee shall be deposited to the same ac- count as the royalty with respect to which such interest is paid. (d) Charge on late deposit of royalty fund to an Indian account Any deposit of royalty funds made by the Sec- retary to an Indian account which is not made by the date required under section 1714 of this title shall include an interest charge computed at the rate applicable under section 6621 of title 26. Page 369 TITLE 30—MINERAL LANDS AND MINING § 1721 (e) Nonliability of States for Secretary’s failure to comply with the Emergency Petroleum Al- location Act of 1973 or regulations there- under Notwithstanding any other provision of law, no State will be assessed for any interest or pen- alties found to be due against the Secretary for failure to comply with the Emergency Petro- leum Allocation Act of 1973 [15 U.S.C. 751 et seq.] or regulation of the Secretary of Energy there- under concerning crude oil certification or pric- ing with respect to crude oil taken by the Sec- retary in kind as royalty. Any State share of an overcharge, resulting from such failure to com- ply, shall be assessed against moneys found to be due and owing to such State as a result of au- dits of royalty accounts for transactions which took place prior to January 12, 1983, except that if after the completion of such audits, sufficient moneys have not been found due and owing to any State, the State shall be assessed the bal- ance of that State’s share of the overcharge. (f) Limitation on interest charged Interest shall be charged under this section only for the number of days a payment is late. (g) Omitted (h) Estimated payment A lessee or its designee may make a payment for the approximate amount of royalties (herein- after in this subsection ‘‘estimated payment’’) that would otherwise be due for such lease by the date royalties are due for that lease. When an estimated payment is made, actual royalties are payable at the end of the month following the month in which the estimated payment is made. If the estimated payment was less than the amount of actual royalties due, interest is owed on the underpaid amount. If the lessee or its designee makes a payment for such actual royalties, the lessee or its designee may apply the estimated payment to future royalties. Any estimated payment may be adjusted, recouped, or reinstated at any time by the lessee or its designee. (i) Volume allocation of oil and gas production (1) Except as otherwise provided by this sub- section— (A) a lessee or its designee of a lease in a unit or communitization agreement which contains only Federal leases with the same royalty rate and funds distribution shall re- port and pay royalties on oil and gas produc- tion for each production month based on the actual volume of production sold by or on be- half of that lessee; (B) a lessee or its designee of a lease in any other unit or communitization agreement shall report and pay royalties on oil and gas production for each production month based on the volume of oil and gas produced from such agreement and allocated to the lease in accordance with the terms of the agreement; and (C) a lessee or its designee of a lease that is not contained in a unit or communitization agreement shall report and pay royalties on oil and gas production for each production month based on the actual volume of produc- tion sold by or on behalf of that lessee. (2) This subsection applies only to require- ments for reporting and paying royalties. Noth- ing in this subsection is intended to alter a les- see’s liability for royalties on oil or gas produc- tion based on the share of production allocated to the lease in accordance with the terms of the lease, a unit or communitization agreement, or any other agreement. (3) For any unit or communitization agree- ment if all lessees contractually agree to an al- ternative method of royalty reporting and pay- ment, the lessees may submit such alternative method to the Secretary or the delegated State for approval and make payments in accordance with such approved alternative method so long as such alternative method does not reduce the amount of the royalty obligation. (4) The Secretary or the delegated State shall grant an exception from the reporting and pay- ment requirements for marginal properties by allowing for any calendar year or portion there- of royalties to be paid each month based on the volume of production sold. Interest shall not ac- crue on the difference for the entire calendar year or portion thereof between the amount of oil and gas actually sold and the share of pro- duction allocated to the lease until the begin- ning of the month following such calendar year or portion thereof. Any additional royalties due or overpaid royalties and associated interest shall be paid, refunded, or credited within six months after the end of each calendar year in which royalties are paid based on volumes of production sold. For the purpose of this sub- section, the term ‘‘marginal property’’ means a lease that produces on average the combined equivalent of less than 15 barrels of oil per well per day or 90 thousand cubic feet of gas per well per day, or a combination thereof, determined by dividing the average daily production of crude oil and natural gas from producing wells on such lease by the number of such wells, un- less the Secretary, together with the State con- cerned, determines that a different production is more appropriate. (5) Not later than two years after August 13, 1996, the Secretary shall issue any appropriate demand for all outstanding royalty payment dis- putes regarding who is required to report and pay royalties on production from units and communitization agreements outstanding on August 13, 1996, and collect royalty amounts owed on such production. (j) Production allocation The Secretary shall issue all determinations of allocations of production for units and communitization agreements within 120 days of a request for determination. Until the Secretary issues the determination, the lessee or its des- ignee of a lease in a unit or communitization agreement shall report and pay royalties on oil and gas production for each production month in accordance with the terms of the proposed al- location of production for the unit or communitization agreement. After the Sec- retary issues the determination, the lessee or its designee shall, as necessary, correct such re- ports and the amount of royalties paid on oil and gas production under the unit or communitization agreement by not later than Page 370 TITLE 30—MINERAL LANDS AND MINING § 1721a the end of the third month following the month in which the lessee or its designee receives the determination from the Secretary. Subject to the full and timely monthly payment of royal- ties to all parties in accordance with the terms of the proposed allocation of production for the unit or communitization agreement, the Sec- retary shall waive interest due on obligations subject to the determination until the end of the third month following the month in which the lessee or its designee receives the determination from the Secretary. This subsection shall not apply to unit or communization agreements containing Indian lands. (Pub. L. 97–451, title I, § 111, Jan. 12, 1983, 96 Stat. 2455; Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095; Pub. L. 104–185, § 6(a)–(e), (h)(1), Aug. 13, 1996, 110 Stat. 1712–1715; Pub. L. 104–200, § 1(3)–(6), Sept. 22, 1996, 110 Stat. 2421; Pub. L. 113–67, div. A, title III, § 305(a), Dec. 26, 2013, 127 Stat. 1183; Pub. L. 113–291, div. B, title XXX, § 3021(c)(2), Dec. 19, 2014, 128 Stat. 3761; Pub. L. 114–94, div. C, title XXXII, § 32301, Dec. 4, 2015, 129 Stat. 1741; Pub. L. 118–81, § 2, Sept. 20, 2024, 138 Stat. 1520.) Editorial Notes REFERENCES IN TEXT The Emergency Petroleum Allocation Act of 1973, re- ferred to in subsec. (e), is Pub. L. 93–159, Nov. 27, 1973, 87 Stat. 628, which was classified generally to chapter 16A (§ 751 et seq.) of Title 15, Commerce and Trade, and was omitted from the Code pursuant to section 760g of Title 15, which provided for the expiration of the Presi- dent’s authority under that chapter on Sept. 30, 1981. CODIFICATION Section is comprised of section 111 of Pub. L. 97–451. Subsec. (g) of section 111 of Pub. L. 97–451 amended sec- tion 191(a) of this title. AMENDMENTS 2024—Subsec. (j). Pub. L. 118–81 amended subsec. (j) generally. Prior to amendment, text read as follows: ‘‘The Secretary shall issue all determinations of alloca- tions of production for units and communitization agreements within 120 days of a request for determina- tion. If the Secretary fails to issue a determination within such 120-day period, the Secretary shall waive interest due on obligations subject to the determina- tion until the end of the month following the month in which the determination is made.’’ 2015—Subsec. (h). Pub. L. 114–94 redesignated subsec. (j) as (h), struck out ‘‘If the estimated payment exceeds the actual royalties due, interest is owed on the over- payment.’’ after ‘‘underpaid amount.’’, and struck out former subsec. (h) which related to lessee or designee interest. Subsec. (i). Pub. L. 114–94, § 32301(1), (2), redesignated subsec. (k) as (i) and struck out former subsec. (i) which related to limitation on interest. Subsec. (j). Pub. L. 114–94, § 32301(2), redesignated sub- sec. (l) as (j). Former subsec. (j) redesignated (h). Subsecs. (k), (l). Pub. L. 114–94, § 32301(2), redesignated subsecs. (k) and (l) as (i) and (j), respectively. 2014—Subsec. (h). Pub. L. 113–291 substituted ‘‘a rate equal to the sum of the Federal short-term rate deter- mined under section 6621(b) of title 26 plus 1 percentage point.’’ for ‘‘the rate obtained by applying the provi- sions of subparagraphs (A) and (B) of section 6621(a)(1) of title 26, but determined without regard to the sen- tence following subparagraph (B) of section 6621(a)(1).’’ 2013—Subsec. (i). Pub. L. 113–67 inserted subsec. head- ing; designated first sentence as par. (1), inserted head- ing, and substituted ‘‘Interest shall not be paid on any excessive overpayment.’’ for ‘‘Upon a determination by the Secretary that an excessive overpayment (based upon all obligations of a lessee or its designee for a given reporting month) was made for the sole purpose of receiving interest, interest shall not be paid on the excessive amount of such overpayment.’’; and des- ignated second sentence as par. (2) and inserted head- ing. 1996—Pub. L. 104–185, § 6(h)(1), substituted ‘‘Royalty terms and conditions, interest, and penalties’’ for ‘‘Royalty interest, penalties and payments’’ in section catchline. Subsec. (h). Pub. L. 104–185, § 6(a), added subsec. (h). Subsec. (i). Pub. L. 104–200, § 1(3), inserted ‘‘not’’ after ‘‘receiving interest, interest shall’’. Pub. L. 104–185, § 6(b), added subsec. (i). Subsec. (j). Pub. L. 104–200, § 1(4), (5), substituted ‘‘date royalties are due’’ for ‘‘rate royalties are due’’, ‘‘interest is owed on the underpaid amount’’ for ‘‘inter- est is owned on the underpaid amount’’, and ‘‘interest is owed on the overpayment’’ for ‘‘interest is owned on the overpayment’’. Pub. L. 104–185, § 6(c), added subsec. (j). Subsec. (k). Pub. L. 104–185, § 6(d), added subsec. (k). Subsec. (k)(4). Pub. L. 104–200, § 1(6), substituted ‘‘ad- ditional royalties due’’ for ‘‘additional royalties dues’’. Subsec. (l). Pub. L. 104–185, § 6(e), added subsec. (l). 1986—Subsecs. (a), (b), (d). Pub. L. 99–514 substituted ‘‘Internal Revenue Code of 1986’’ for ‘‘Internal Revenue Code of 1954’’, which for purposes of codification was translated as ‘‘title 26’’ thus requiring no change in text. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2013 AMENDMENT Pub. L. 113–67, div. A, title III, § 305(b), Dec. 26, 2013, 127 Stat. 1183, provided that: ‘‘The amendment made by subsection (a) [amending this section] shall take effect on July 1, 2014.’’ EFFECTIVE DATE OF 1996 AMENDMENT Amendment by Pub. L. 104–185 applicable with re- spect to production of oil and gas after the first day of the month following Aug. 13, 1996, except as provided by subsecs. (h) and (k)(5) of this section, see section 11 of Pub. L. 104–185, set out as a note under section 1701 of this title. APPLICABILITY OF 1996 AMENDMENT Amendment by Pub. L. 104–185 not applicable to any privately owned minerals or with respect to Indian lands, see sections 9 and 10 of Pub. L. 104–185, set out as a note under section 1701 of this title. PAYMENT OF INTEREST CHARGES FROM CURRENT RECEIPTS Pub. L. 108–447, div. E, title I, Dec. 8, 2004, 118 Stat. 3053, as amended by Pub. L. 110–161, div. F, title I, Dec. 26, 2007, 121 Stat. 2109, provided in part: ‘‘That in fiscal year 2005 and thereafter, notwithstanding 30 U.S.C. 191(a) and 43 U.S.C. 1338, the Secretary shall pay amounts owed to States and Indian accounts under the provisions of 30 U.S.C. 1721(b) and (d) from amounts re- ceived as current receipts from bonuses, royalties, in- terest collected from lessees and designees, and rentals of the public lands and the outer continental shelf under provisions of the Mineral Leasing Act (30 U.S.C. 181 et seq.), and the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.), which are not payable to a State or the Reclamation Fund.’’ § 1721a. Adjustments and refunds (a) Adjustments to royalties paid to Secretary or a delegated State (1) If, during the adjustment period, a lessee or its designee determines that an adjustment or