30 U.S. Code § 1721 - Royalty terms and conditions, interest, and penalties
In the case of oil and gas leases where royaltypayments 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 underpayments 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.
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 Secretary 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.
Notwithstanding any other provision of law, no State will be assessed for any interest or penalties found to be due against the Secretary for failure to comply with the Emergency Petroleum Allocation Act of 1973 [15 U.S.C. 751 et seq.] or regulation of the Secretary of Energy thereunder concerning crude oil certification or pricing with respect to crude oil taken by the Secretary in kind as royalty. Any State share of an overcharge, resulting from such failure to comply, shall be assessed against moneys found to be due and owing to such State as a result of audits 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 balance of that State’s share of the overcharge.
Interest shall be charged under this section only for the number of days a payment is late.
A lessee or its designee may make a payment for the approximate amount of royalties (hereinafter 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.
The Secretary shall issue all determinations of allocations of production for units and communitization agreements within 120 days of a request for determination. If the Secretary fails to issue a determination within such 120-day period, the Secretary shall waive interest due on obligations subject to the determination until the end of the month following the month in which the determination is made.
The Emergency Petroleum Allocation Act of 1973, referred to in subsec. (e), is Pub. L. 93–159, Nov. 27, 1973, 87 Stat. 628, as amended, 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 President’s authority under that chapter on Sept. 30, 1981.
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 overpayment.” 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 subsec. (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 determined under section 6621(b) of title 26 plus 1 percentage point.” for “the rate obtained by applying the provisions of subparagraphs (A) and (B) of section 6621(a)(1) of title 26, but determined without regard to the sentence following subparagraph (B) of section 6621(a)(1).”
2013—Subsec. (i). Pub. L. 113–67 inserted subsec. heading; designated first sentence as par. (1), inserted heading, 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 designated second sentence as par. (2) and inserted heading.
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 “interest 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 “additional 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.
Amendment by Pub. L. 104–185 applicable with respect 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.
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.