Sec. 70806. Technical amendments to FOGRMA

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Section 3 of the Federal Oil and Gas Royalty Management Act of 1982 ( 30 U.S.C. 1702 ) is amended— in paragraph (20)(A), by striking : and all that follows through Provided , That subject of the judicial proceeding ; in paragraph (20)(B), by striking (with written notice to the lessee who designated the designee) ; in paragraph (23)(A), by striking (with written notice to the lessee who designated the designee) ; by amending paragraph

(24)to read as follows: designee means a person who pays, offsets, or credits monies, makes adjustments, requests and receives refunds, or submits reports with respect to payments a lessee must make pursuant to section 102(a); ; in paragraph (25), in subparagraph (B)— by striking (subject to the provisions of section 102(a) of this Act) ; and in clause (ii), by striking subclause

(IV)and all that follows through the end of the subparagraph and inserting the following: any assignment, that arises from or relates to any lease, easement, right-of-way, permit, or other agreement regardless of form administered by the Secretary for, or any mineral leasing law related to, the exploration, production, and development of oil and gas or other energy resource on Federal lands or the Outer Continental Shelf; ; and in paragraph (29), by inserting or permit after lease . Section 101 of the Federal Oil and Gas Royalty Management Act of 1982 ( 30 U.S.C. 1711 ) is amended by adding at the end the following new subsection: The Secretary may, as an adjunct to audits of accounts for leases, conduct compliance reviews of accounts. Such reviews shall not constitute nor substitute for audits of lease accounts. The Secretary shall immediately refer any disparity uncovered in such a compliance review to a program auditor. The Secretary shall, before completion of a compliance review, provide notice of the review to designees whose obligations are the subject of the review. . Section 102(a) of the Federal Oil and Gas Royalty Management Act of 1982 ( 30 U.S.C. 1712(a) ) is amended to read as follows: In order to increase receipts and achieve effective collections of royalty and other payments, a lessee who is required to make any royalty or other payment under a lease, easement, right-of-way, permit, or other agreement, regardless of form, or under the mineral leasing laws, shall make such payment in the time and manner as may be specified by the Secretary or the applicable delegated State. Any person who pays, offsets, or credits monies, makes adjustments, requests and receives refunds, or submits reports with respect to payments the lessee must make is the lessee’s designee under this Act. A designee shall be liable for any payment obligation of any lessee on whose behalf the designee pays royalty under the lease. The person owning operating rights in a lease and a person owning legal record title in a lease shall be liable for that person’s pro rata share of payment obligations under the lease. . Section 103(b) of the Federal Oil and Gas Royalty Management Act of 1982 ( 30 U.S.C. 1713(b) ) is amended by striking 6 and inserting 7 . Section 111A of the Federal Oil and Gas Royalty Management Act of 1982 ( 30 U.S.C. 1721a ) is amended— in subsection (a)— by amending paragraph

(3)to read as follows: 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. Except as provided in subparagraph (C), no adjustment may be made with respect to an obligation after the completion of an audit or compliance review of such obligation unless such adjustment is approved by the Secretary or the applicable delegated State, as appropriate. If an overpayment is identified during an audit, the Secretary shall allow a credit in the amount of the overpayment. ; and in paragraph (4)— by striking six-year and inserting four-year ; and by striking period shall and inserting period may ; and in subsection (b)(1)— in subparagraph (C), by striking and ; in subparagraph (D), by striking the period and inserting ; and ; and by adding at the end the following: is made within the adjustment period for that obligation. . Section 115(b)(1) of the Federal Oil and Gas Royalty Management Act of 1982 ( 30 U.S.C. 1724(b)(1) ) is amended to read as follows: The Secretary or a delegated State shall commence a judicial proceeding or demand which arises from, or relates to an obligation, within seven years from the date on which the obligation becomes due and if not so commenced shall be barred. A lessee shall commence a judicial proceeding or demand which arises from, or relates to an obligation, within four years from the date on which an obligation becomes due and if not so commenced shall be barred. If the Secretary, a delegated State, a lessee, or designee is barred from commencement of a judicial proceeding or demand for an obligation, it— shall not take any other or further action regarding that obligation, including (but not limited to) the issuance of any order, request, demand or other communication seeking any document, accounting, determination, calculation, recalculation, payment, principal, interest, assessment, or penalty or the initiation, pursuit or completion of an audit with respect to that obligation; and shall not pursue any other equitable or legal remedy, including equitable recoupment, whether under statute or common law, with respect to an action on, defense against, or an enforcement of said obligation. . Section 115(c) of the Federal Oil and Gas Royalty Management Act of 1982 ( 30 U.S.C. 1724(c) ) is amended by adding at the end the following new paragraph: In the case of an adjustment under section 111A(a) in which a recoupment by the lessee results in an underpayment of an obligation, the obligation becomes due on the date the lessee or its designee makes the adjustment. . Section 115(h) of the Federal Oil and Gas Royalty Management Act of 1982 ( 30 U.S.C. 1724(h) ) is amended— in paragraph (1), in the heading, by striking and inserting 33-month ; 48-month by striking 33 months each place it appears and inserting 48 months ; and by striking 33-month each place it appears and inserting 48-month . The Secretary of the Interior shall issue regulations by not later than 1 year after the date of enactment of this Act that establish a civil penalty for late or incorrect reporting of data under the Federal Oil and Gas Royalty Management Act of 1982. The amount of the civil penalty shall be— an amount that the Secretary determines is sufficient to ensure filing of data in accordance with that Act; and not less than $10 for each failure to file correct data in accordance with that Act. Except as provided in paragraph (2), the regulations issued under this section shall be substantially similar to section 216.40 of title 30, Code of Federal Regulations, as most recently in effect before the date of enactment of this Act. Section 206 of the Federal Oil and Gas Royalty Management Act of 1982 ( 30 U.S.C. 1736 ) is amended by striking Any payments under this section shall be reduced by an amount equal to any payments provided or due to such State or Indian Tribe under the cooperative agreement or delegation, as applicable, during the fiscal year in which the civil penalty is received, up to the total amount provided or due for that fiscal year. . Section 111A of the Federal Oil and Gas Royalty Management Act of 1982 ( 30 U.S.C. 1721a ) is amended— in subsection (a)— by amending paragraph

(3)to read as follows: 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. Except as provided in subparagraph (C), no adjustment may be made with respect to an obligation after the completion of an audit or compliance review of such obligation unless such adjustment is approved by the Secretary or the applicable delegated State, as appropriate. If an overpayment is identified during an audit, the Secretary shall allow a credit in the amount of the overpayment. ; and in paragraph (4)— by striking six-year and inserting four-year ; and by striking period shall and inserting period may ; and in subsection (b)(1)— in subparagraph (C), by striking and ; in subparagraph (D), by striking the period and inserting ; and ; and by adding at the end the following: is made within the adjustment period for that obligation. . Section 115(d)(1) of the Federal Oil and Gas Royalty Management Act of 1982 ( 30 U.S.C. 1724(d)(1) ) is amended— by striking (with notice to the lessee who designated the designee) ; and by adding at the end A tolling agreement executed by a designee shall bind both the owner of legal record title in a lease and the owner of operating rights in a lease, and any designee. The owner of the legal record title and the owner of operating rights in a lease shall be bound by the tolling agreement to the extent of their pro rata share of payment obligations under the lease. . Section 115(d)(2)(A) of the Federal Oil and Gas Royalty Management Act of 1982 ( 30 U.S.C. 1724(d)(2)(A) ) is amended by striking (with notice to the lessee who designated the designee, which notice shall not constitute a subpoena to the lessee) . Not later than 1 year after the date of enactment of this Act, the Secretary of the Interior shall publish final regulations with respect to required recordkeeping, under the authority provided in section 103 of the Federal Oil and Gas Royalty Management Act of 1982 ( 30 U.S.C. 1713 ), as amended by this Act. Section 103(a) of the Federal Oil and Gas Royalty Management Act of 1982 ( 30 U.S.C. 1713(a) ) is amended to read: A lessee, operator, or other person directly involved in developing, producing, treating, transporting, processing, purchasing, or selling oil or gas subject to this chapter through the point of first arm’s-length sale, the point of royalty determination, or the point that processing is complete, whichever is later, shall establish and maintain any records, make any reports, and provide any information that the Secretary may, by rule, reasonably require for the purposes of implementing this chapter or determining compliance with rules or orders under this chapter. Upon the request of any officer or employee duly designated by the Secretary or any State or Indian Tribe conducting an audit or investigation pursuant to this chapter, the appropriate records, reports, or information which may be required by this section shall be made available for inspection and duplication by such officer or employee, State, or Indian Tribe. . Not later than 180 days after the date of enactment of this Act, the Secretary of the Interior shall publish final regulations prescribing when a Federal lessee or designee must report and pay royalties on oil and gas production for each month based on— the volume of oil and gas produced from a lease or allocated to the lease in accordance with the terms of a unit or communitization agreement; or the actual volume of oil and gas sold by or on behalf of the lessee. The Secretary shall give consideration to requiring all reporting and paying based on the volume of oil and gas produced from a lease or allocated to the lease in accordance with the terms of a unit or communitization agreement without regard to the actual volume of oil and gas sold by or on behalf of a lessee. Section 111(i) of the Federal Oil and Gas Royalty Management Act of 1982 ( 30 U.S.C. 1721(i) ) is amended to read: Except as otherwise provided by this subsection— a lessee or its designee of a lease in any 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 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 volume of oil and gas produced from the lease unless the Secretary promulgates a final rule to allow or require that the lessee 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. .

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Sec. 70806

Technical amendments to FOGRMA

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