1. U.S. Code
  2. title 30
  3. chapter 29
  4. subchapter I
  5. § 1721

Collapse to view only § 1721. Royalty terms and conditions, interest, and penalties

§ 1711. Duties of Secretary
(a) Establishment of inspection, collection, and accounting and auditing system
(b) Annual inspection of lease sites; training
The Secretary shall—
(1) establish procedures to ensure that authorized and properly identified representatives of the Secretary will inspect at least once annually each lease site producing or expected to produce significant quantities of oil or gas in any year or which has a history of noncompliance with applicable provisions of law or regulations; and
(2) establish and maintain adequate programs providing for the training of all such authorized representatives in methods and techniques of inspection and accounting that will be used in the implementation of this chapter.
(c) Audit and reconciliation of lease accounts; contracts with certified public accountants; availability of books, accounts, records, etc., necessary for audit
(1) The Secretary shall audit and reconcile, to the extent practicable, all current and past lease accounts for leases of oil or gas and take appropriate actions to make additional collections or refunds as warranted. The Secretary shall conduct audits and reconciliations of lease accounts in conformity with the business practices and recordkeeping systems which were required of the lessee by the Secretary for the period covered by the audit. The Secretary shall give priority to auditing those lease accounts identified by a State or Indian tribe as having significant potential for underpayment. The Secretary may also audit accounts and records of selected lessees and operators.
(2) The Secretary may enter into contracts or other appropriate arrangements with independent certified public accountants to undertake audits of accounts and records of any lessee or operator relating to the lease of oil or gas. Selection of such independent certified public accountants shall be by competitive bidding in accordance with chapters 1 to 11 of title 40 and division C (except sections 3302, 3307(e), 3501(b), 3509, 3906, 4710, and 4711) of subtitle I of title 41, except that the Secretary may not enter into a contract or other arrangement with any independent certified public accountant to audit any lessee or operator where such lessee or operator is a primary audit client of such certified public accountant.
(3) All books, accounts, financial records, reports, files, and other papers of the Secretary, or used by the Secretary, which are reasonably necessary to facilitate the audits required under this section shall be made available to any person or governmental entity conducting audits under this chapter.
(Pub. L. 97–451, title I, § 101, Jan. 12, 1983, 96 Stat. 2449.)

CITE AS: 30 USC 1711

§ 1712. Duties of lessees, operators, and motor vehicle transporters
(a) Liability for royalty payments
(b) Development of and compliance with site security plan and minimum site security measures by operators; notification to Secretary of well production
An operator shall—
(1) develop and comply with a site security plan designed to protect the oil or gas produced or stored on an onshore lease site from theft, which plan shall conform with such minimum standards as the Secretary may prescribe by rule, taking into account the variety of circumstances at lease sites;
(2) develop and comply with such minimum site security measures as the Secretary deems appropriate to protect oil or gas produced or stored on a lease site or on the Outer Continental Shelf from theft; and
(3) not later than the 5th business day after any well begins production anywhere on a lease site or allocated to a lease site, or resumes production in the case of a well which has been off of production for more than 90 days, notify the Secretary, in the manner prescribed by the Secretary, of the date on which such production has begun or resumed.
(c) Possession of documentation by transporters of oil or gas by motor vehicle or pipeline
(1) Any person engaged in transporting by motor vehicle any oil from any lease site, or allocated to any such lease site, shall carry, on his person, in his vehicle, or in his immediate control, documentation showing, at a minimum, the amount, origin, and intended first destination of the oil.
(2) Any person engaged in transporting any oil or gas by pipeline from any lease site, or allocated to any lease site, on Federal or Indian lands shall maintain documentation showing, at a minimum, amount, origin, and intended first destination of such oil or gas.
(Pub. L. 97–451, title I, § 102, Jan. 12, 1983, 96 Stat. 2450; Pub. L. 104–185, § 6(g), Aug. 13, 1996, 110 Stat. 1715.)

CITE AS: 30 USC 1712

§ 1713. Required recordkeeping
(a) Maintenance and availability of records, reports, and information for inspection and duplication
(b) Length of time maintenance required
(Pub. L. 97–451, title I, § 103, Jan. 12, 1983, 96 Stat. 2451.)

CITE AS: 30 USC 1713

§ 1714. Deposit of royalty funds to Indian accounts

Deposits of any royalty funds derived from the production of oil or gas from, or allocated to, Indian lands shall be made by the Secretary to the appropriate Indian account at the earliest practicable date after such funds are received by the Secretary but in no case later than the last business day of the month in which such funds are received.

(Pub. L. 97–451, title I, § 104(b), Jan. 12, 1983, 96 Stat. 2452.)

CITE AS: 30 USC 1714

§ 1715. Explanation of payments
(a) Description, period, source, etc., of payments to States or Indians
(b) Effective date
(Pub. L. 97–451, title I, § 105, Jan. 12, 1983, 96 Stat. 2452.)

CITE AS: 30 USC 1715

§ 1716. Liabilities and bonding
A person (including any agent or employee of the United States and any independent contractor) authorized to collect, receive, account for, or otherwise handle any moneys payable to, or received by, the Department of the Interior which are derived from the sale, lease, or other disposal of any oil or gas shall be—
(1) liable to the United States for any losses caused by any intentional or reckless action or inaction of such individual with respect to such moneys; and
(2) in the case of an independent contractor, required as the Secretary deems necessary to maintain a bond commensurate with the amount of money for which such individual could be liable to the United States.
(Pub. L. 97–451, title I, § 106, Jan. 12, 1983, 96 Stat. 2452.)

CITE AS: 30 USC 1716

§ 1717. Hearings and investigations
(a) Authorization; affidavits, oaths, subpenas, testimony, and payment of witnesses
In carrying out his duties under this chapter the Secretary may conduct any investigation or other inquiry necessary and appropriate and may conduct, after notice, any hearing or audit, necessary and appropriate to carrying out his duties under this chapter. In connection with any such hearings, inquiry, investigation, or audit, the Secretary is also authorized where reasonably necessary—
(1) to require by special or general order, any person to submit in writing such affidavits and answers to questions as the Secretary may reasonably prescribe, which submission shall be made within such reasonable period and under oath or otherwise, as may be necessary;
(2) to administer oaths;
(3) to require by subpena the attendance and testimony of witnesses and the production of all books, papers, production and financial records, documents, matter, and materials, as the Secretary may request;
(4) to order testimony to be taken by deposition before any person who is designated by the Secretary and who has the power to administer oaths, and to compel testimony and the production of evidence in the same manner as authorized under paragraph (3) of this subsection; and
(5) to pay witnesses the same fees and mileage as are paid in like circumstances in the courts of the United States.
(b) Refusal to obey subpena
(Pub. L. 97–451, title I, § 107, Jan. 12, 1983, 96 Stat. 2452.)

CITE AS: 30 USC 1717

§ 1718. Inspections
(a) Motor vehicles on lease sites; vehicles not on lease site
(1) On any lease site on Federal or Indian lands, any authorized and properly identified representative of the Secretary may stop and inspect any motor vehicle that he has probable cause to believe is carrying oil from a lease site on Federal or Indian lands or allocated to such a lease site, for the purpose of determining whether the driver of such vehicle has documentation related to such oil as required by law.
(2) Any authorized and properly identified representative of the Secretary, accompanied by any appropriate law enforcement officer, or an appropriate law enforcement officer alone, may stop and inspect any motor vehicle which is not on a lease site if he has probable cause to believe the vehicle is carrying oil from a lease site on Federal or Indian lands or allocated to such a lease site. Such inspection shall be for the purpose of determining whether the driver of such vehicle has the documentation required by law.
(b) Inspection of lease sites for compliance with mineral leasing laws and this chapter
(c) Right of Secretary to enter upon and travel across lease sites
(Pub. L. 97–451, title I, § 108, Jan. 12, 1983, 96 Stat. 2453.)

CITE AS: 30 USC 1718

§ 1719. Civil penalties
(a) Failure to comply with applicable law, to permit inspection, or to notify Secretary of assignment; exceptions to application of penalty
Any person who—
(1) after due notice of violation or after such violation has been reported under subparagraph (A), fails or refuses to comply with any requirements of this chapter or any mineral leasing law, any rule or regulation thereunder, or the terms of any lease or permit issued thereunder; or
(2) fails to permit inspection authorized in section 1718 of this title or fails to notify the Secretary of any assignment under section 1712(a)(2) 1
1 See References in Text note below.
of this title
shall be liable for a penalty of up to $500 per violation for each day such violation continues, dating from the date of such notice or report. A penalty under this subsection may not be applied to any person who is otherwise liable for a violation of paragraph (1) if:
(A) the violation was discovered and reported to the Secretary or his authorized representative by the liable person and corrected within 20 days after such report or such longer time as the Secretary may agree to; or
(B) after the due notice of violation required in paragraph (1) has been given to such person by the Secretary or his authorized representative, such person has corrected the violation within 20 days of such notification or such longer time as the Secretary may agree to.
(b) Failure to take corrective action
(c) Failure to make royalty payment; failure to permit lawful entry, inspection, or audit; failure to notify Secretary of well production
Any person who—
(1) knowingly or willfully fails to make any royalty payment by the date as specified by statute, regulation, order or terms of the lease;
(2) fails or refuses to permit lawful entry, inspection, or audit; or
(3) knowingly or willfully fails or refuses to comply with section 1712(b)(3) of this title,
shall be liable for a penalty of up to $10,000 per violation for each day such violation continues.
(d) False information; unauthorized removal, etc., of oil or gas; purchase, sale, etc., of stolen oil or gas
Any person who—
(1) knowingly or willfully prepares, maintains, or submits false, inaccurate, or misleading reports, notices, affidavits, records, data, or other written information;
(2) knowingly or willfully takes or removes, transports, uses or diverts any oil or gas from any lease site without having valid legal authority to do so; or
(3) purchases, accepts, sells, transports, or conveys to another, any oil or gas knowing or having reason to know that such oil or gas was stolen or unlawfully removed or diverted,
shall be liable for a penalty of up to $25,000 per violation for each day such violation continues.
(e) Hearing
(f) Deduction of penalty from sums owed by United States
(g) Compromise or reduction of penalties
(h) Notice
(i) Reasons on record for amount of penalty
(j) Review
(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 include an order to pay.
(l) Nonliability for leases automatically terminated
(Pub. L. 97–451, title I, § 109, Jan. 12, 1983, 96 Stat. 2454.)

CITE AS: 30 USC 1719

§ 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 imprisonment for not more than 2 years, or both.

(Pub. L. 97–451, title I, § 110, Jan. 12, 1983, 96 Stat. 2455.)

CITE AS: 30 USC 1720

§ 1720a. Applicability of civil and criminal penalties to various uses of Federal or Indian lands and Outer Continental Shelf

Notwithstanding any other provision of law, Sections 1

1 So in original. Probably should not be capitalized.
1719 and 1720 2
2 See References in Text note below.
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 Indian 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, easement, right of way, or other agreement, regardless 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 agreement, regardless of form, or by applicable regulation.

(Pub. L. 111–88, div. A, title I, § 114, Oct. 30, 2009, 123 Stat. 2928.)

CITE AS: 30 USC 1720a

§ 1721. Royalty terms and conditions, interest, and penalties
(a) Charge on late royalty payment or royalty payment deficiency
(b) Charge on late payment made by Secretary to States
(c) Deposit in royalty accounts of charges on royalties due and owing Indians
(d) Charge on late deposit of royalty fund to an Indian account
(e) Nonliability of States for Secretary’s failure to comply with the Emergency Petroleum Allocation Act of 1973 or regulations thereunder
(f) Limitation on interest charged
(g) Omitted
(h) Estimated payment
(i) Volume allocation of oil and gas production
(1) Except as otherwise provided by this subsection—
(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 report and pay royalties on oil and gas production for each production month based on the actual volume of production sold by or on behalf 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 production sold by or on behalf of that lessee.
(2) This subsection applies only to requirements for reporting and paying royalties. Nothing in this subsection is intended to alter a lessee’s liability for royalties on oil or gas production 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 agreement if all lessees contractually agree to an alternative method of royalty reporting and payment, 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 payment requirements for marginal properties by allowing for any calendar year or portion thereof royalties to be paid each month based on the volume of production sold. Interest shall not accrue on the difference for the entire calendar year or portion thereof between the amount of oil and gas actually sold and the share of production allocated to the lease until the beginning 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 subsection, 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, unless the Secretary, together with the State concerned, 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 disputes 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
(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.)

CITE AS: 30 USC 1721

§ 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 refund request is necessary to correct an underpayment or overpayment of an obligation, the lessee or its designee shall make such adjustment or request a refund within a reasonable period of time and only during the adjustment period. The filing of a royalty report which reflects the underpayment or overpayment of an obligation shall constitute prior written notice to the Secretary or the applicable delegated State of an adjustment.
(2)
(A) For any adjustment, the lessee or its designee shall calculate and report the interest due attributable to such adjustment at the same time the lessee or its designee adjusts the principle 1
1 So in original. Probably should be “principal”.
amount of the subject obligation, except as provided by subparagraph (B).
(B) In the case of a lessee or its designee who determines that subparagraph (A) would impose a hardship, the Secretary or such delegated State shall calculate the interest due and notify the lessee or its designee within a reasonable time of the amount of interest due, unless such lessee or its designee elects to calculate and report interest in accordance with subparagraph (A).
(3) An adjustment or a request for a refund for an obligation may be made after the adjustment period only upon written notice to and approval by the Secretary or the applicable delegated State, as appropriate, during an audit of the period which includes the production month for which the adjustment is being made. If an overpayment is identified during an audit, then the Secretary or the applicable delegated State, as appropriate, shall allow a credit or refund in the amount of the overpayment.
(4) For purposes of this section, the adjustment period for any obligation shall be the six-year period following the date on which an obligation became due. The adjustment period shall be suspended, tolled, extended, enlarged, or terminated by the same actions as the limitation period in section 1724 of this title.
(b) Refunds
(1) In general
A request for refund is sufficient if it—
(A) is made in writing to the Secretary and, for purposes of section 1724 of this title, is specifically identified as a demand;
(B) identifies the person entitled to such refund;
(C) provides the Secretary information that reasonably enables the Secretary to identify the overpayment for which such refund is sought; and
(D) provides the reasons why the payment was an overpayment.
(2) Payment by Secretary of the Treasury
(3) Payment period
(4) Prohibition against reduction of refunds or credits
(Pub. L. 97–451, title I, § 111A, as added Pub. L. 104–185, § 5(a), Aug. 13, 1996, 110 Stat. 1710.)

CITE AS: 30 USC 1721a

§ 1722. Injunction and specific enforcement authority
(a) Civil action by Attorney General
In addition to any other remedy under this chapter or any mineral leasing law, the Attorney General of the United States or his designee 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 required by or under this chapter or any mineral leasing law of the United States.
(b) Venue
(Pub. L. 97–451, title I, § 112, Jan. 12, 1983, 96 Stat. 2456.)

CITE AS: 30 USC 1722

§ 1723. Rewards

Where amounts representing royalty or other payments owed to the United States with respect 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 officer or employee of a State or Indian tribe acting pursuant to a cooperative agreement or delegation under this chapter, or any person acting pursuant to a contract authorized by this chapter.

(Pub. L. 97–451, title I, § 113, Jan. 12, 1983, 96 Stat. 2456.)

CITE AS: 30 USC 1723

§ 1724. Secretarial and delegated States’ actions and limitation periods
(a) In general
(b) Limitation period
(1) In general
(2) Rule of construction
(3) Application of certain limitations
(c) Obligation becomes due
(1) In general
(2) Royalty obligations
(d) Tolling of limitation periodThe running of the limitation period under subsection (b) shall not be suspended, tolled, extended, 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
(2) Subpoena
(A) The issuance of a subpoena to a lessee or its designee (with notice to the lessee who designated the designee, which notice shall not constitute a subpoena to the lessee) in accordance with the provisions of subparagraph (B)(i) shall toll the limitation period with respect to the obligation which is the subject of a subpoena 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 possession or control, or (iii) a court has determined in a final decision that such records are not 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 Acting Assistant Secretary of the Interior who is a schedule C employee (as defined by section 213.3301 of title 5, Code of Federal Regulations), 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 section 1735 of this title, the State, acting through the highest State official having ultimate authority over the collection of royalties from leases on Federal lands within the State, may issue such subpoena, but may not delegate 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 delegated 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 delegated 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 responsibilities under this chapter; or(II) the lessee or its designee has in writing 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 accordance with the Secretary’s or such delegated State’s responsibilities under this chapter; or(III) the lessee or its designee has unreasonably delayed in producing records necessary for an audit, investigation or other inquiry made in accordance with the Secretary’s or the applicable delegated State’s responsibilities under this chapter after the Secretary’s or delegated State’s written request.
(C) In seeking records, the Secretary or the applicable delegated State shall afford the lessee 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
(4) Order to perform restructured accounting
(A)
(i) The issuance of a notice under subparagraph (D) that the lessee or its designee has not substantially complied with the requirement to perform a restructured accounting shall toll the limitation period with respect 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 notice and ending 120 days after the date on which (I) the Secretary or the applicable delegated State receives written notice that the accounting or other requirement has been performed, 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 delegated State may issue an order to perform a restructured accounting to a lessee or its designee 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 obligation based upon the Secretary’s or the delegated State’s finding that the lessee or its designee 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 responsibility for the royalty management program, which position is currently designated as the “Associate Director for Royalty Management”, 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 Federal lands within the State, may issue such order to perform, which may not be delegated to any other person. An order to perform a restructured accounting shall—(I) be issued within a reasonable period of time from when the audit identifies the systemic, 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 restructured accounting; and(V) provide the lessee or its designee 60 days within which to file an administrative appeal of the order to perform a restructured accounting.
(C) An order to perform a restructured accounting shall not mean or be construed to include any other action by or on behalf of the Secretary or a delegated State.
(D) If a lessee or its designee fails to substantially 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 designee has not substantially complied with the requirements to perform a restructured accounting. A lessee or its designee shall be given a reasonable time within which to perform the restructured accounting. Such notice may be issued under this section only by an Assistant Secretary of the Interior or an acting 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 pursuant to section 1735 of this title, the State, acting through the highest State official having ultimate authority over the collection of royalties 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 periodAn 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 writing.
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
(g) Timely collections
(h) Appeals and final agency action
(1) 33-month period
(2) Effect of failure to issue decisionIf 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 Secretary, which decision shall be deemed to affirm those issues for which the agency rendered a decision prior to the end of such period, as to any monetary obligation the principal amount of which is $10,000 or more, and the appellant shall have a right to judicial review of such deemed final decision in accordance with title 5.
(i) Collections of disputed amounts due
(j) Enforcement of claim for judicial review
(k) Implementation of final decision
(l) Stay of payment obligation pending review
(Pub. L. 97–451, title I, § 115, as added Pub. L. 104–185, § 4(a), Aug. 13, 1996, 110 Stat. 1704; amended Pub. L. 104–200, § 1(2), Sept. 22, 1996, 110 Stat. 2421.)

CITE AS: 30 USC 1724

§ 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 submits erroneous reports under this chapter. Assessments 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.)

CITE AS: 30 USC 1725

§ 1726. Alternatives for marginal properties
(a) Determination of best interests of State concerned and United States
(b) Prepayment of royalty
(1) In general
Notwithstanding the provisions of any lease to the contrary, for any lease or leases or well or wells identified by the Secretary and the State concerned pursuant to subsection (a), the Secretary is authorized to accept a prepayment for royalties in lieu of monthly royalty payments under the lease for the remainder of the lease term if the affected lessee so agrees. Any prepayment agreed to by the Secretary, State concerned and lessee which is less than an average $500 per month in total royalties shall be effectuated under this section not earlier than two years after August 13, 1996, and, any prepayment which is greater than an average $500 per month in total royalties shall be effectuated under this section not earlier than three years after August 13, 1996. The Secretary and the State concerned may condition their acceptance of the prepayment authorized under this section on the lessee’s agreeing to such terms and conditions as the Secretary and the State concerned deem appropriate and consistent with the purposes of this chapter. Such terms may—
(A) provide for prepayment that does not result in a loss of revenue to the United States in present value terms;
(B) include provisions for receiving additional prepayments or royalties for developments in the lease or leases or well or wells that deviate significantly from the assumptions and facts on which the valuation is determined; and
(C) require the lessee or its designee to provide such periodic production reports as may be necessary to allow the Secretary and the State concerned to monitor production for the purposes of subparagraph (B).
(2) State share
(3) Satisfaction of obligation
(c) Alternative accounting and auditing requirements
(Pub. L. 97–451, title I, § 117, as added Pub. L. 104–185, § 7(a), Aug. 13, 1996, 110 Stat. 1715; amended Pub. L. 104–200, § 1(7), Sept. 22, 1996, 110 Stat. 2421.)

CITE AS: 30 USC 1726

§ 1727. Royalties on all extracted methane
(a) In general
(b) Exception
Subsection (a) shall not apply with respect to—
(1) gas vented or flared for not longer than 48 hours in an emergency situation that poses a danger to human health, safety, or the environment;
(2) gas used or consumed within the area of the lease, unit, or communitized area for the benefit of the lease, unit, or communitized area; or
(3) gas that is unavoidably lost.
(Pub. L. 117–169, title V, § 50263, Aug. 16, 2022, 136 Stat. 2058.)

CITE AS: 30 USC 1727