[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1014 Introduced in Senate (IS)]

  1st Session
                                S. 1014

     To improve the management of royalties from Federal and Outer 
     Continental Shelf oil and gas leases, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                June 30 (legislative day, June 19), 1995

  Mr. Nickles introduced the following bill; which was read twice and 
       referred to the Committee on Energy and Natural Resources

_______________________________________________________________________

                                 A BILL


 
     To improve the management of royalties from Federal and Outer 
     Continental Shelf oil and gas leases, and for other purposes.
    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Federal Oil and 
Gas Royalty Simplification and Fairness Act of 1995''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Limitation periods.
Sec. 4. Overpayments: offsets and refunds.
Sec. 5. Required recordkeeping.
Sec. 6. Royalty interest, penalties, and payments.
Sec. 7. Limitation on assessments.
Sec. 8. Cost-effective audit and collection requirements.
Sec. 9. Elimination of notice requirement.
Sec. 10. Royalty in kind.
Sec. 11. Time and manner of royalty payment.
Sec. 12. Repeals.
Sec. 13. Indian lands.
Sec. 14. Effective date.
SEC. 2. DEFINITIONS.

    Section 3 of the Federal Oil and Gas Royalty Management Act of 1982 
(30 U.S.C. 1701 et seq.) is amended as follows:
            (1) In paragraph (5), by inserting ``(including any unit 
        agreement and communitization agreement)'' after ``agreement''.
            (2) By amending paragraph (7) to read as follows:
            ``(7) `lessee' means any person to whom the United States 
        issues a lease.''.
            (3) By striking ``and'' at the end of paragraph (15), by 
        striking the period at the end of paragraph (16) and inserting 
        a semicolon, and by adding at the end the following:
            ``(17) `administrative proceeding' means any agency process 
        for rulemaking, adjudication or licensing, as defined in and 
        governed by chapter 5 of title 5, United States Code (relating 
        to administrative procedures);
            ``(18) `assessment' means any fee or charge levied or 
        imposed by the Secretary or the United States other than--
                    ``(A) the principal amount of any royalty, minimum 
                royalty, rental, bonus, net profit share or proceed of 
                sale;
                    ``(B) any interest; and
                    ``(C) any civil or criminal penalty;
            ``(19) `commence' means--
                    ``(A) with respect to a judicial proceeding, the 
                service of a complaint, petition, counterclaim, cross-
                claim, or other pleading seeking affirmative relief or 
                seeking offset or recoupment;
                    ``(B) with respect to an administrative 
                proceeding--
                            ``(i) the receipt by a lessee of an order 
                        to pay issued by the Secretary; or
                            ``(ii) the receipt by the Secretary of a 
                        written request or demand by a lessee, or any 
                        person acting on behalf of a lessee which 
                        asserts an obligation due the lessee;
            ``(20) `credit' means the method by which an overpayment is 
        utilized to discharge, cancel, reduce or offset an obligation 
        in whole or in part;
            ``(21) `obligation' means a duty of the Secretary, the 
        United States, or a lessee--
                    ``(A) to deliver or take oil or gas in kind; or
                    ``(B) to pay, refund, credit or offset monies, 
                including (but not limited to) a duty to calculate, 
                determine, report, pay, refund, credit or offset--
                            ``(i) the principal amount of any royalty, 
                        minimum royalty, rental, bonus, net profit 
                        share or proceed of sale;
                            ``(ii) any interest;
                            ``(iii) any penalty; or
                            ``(iv) any assessment,
                which arises from or relates to any lease administered 
                by the Secretary for, or any mineral leasing law 
                related to, the exploration, production and development 
                of oil or gas on Federal lands or the Outer Continental 
                Shelf;
            ``(22) `offset' means the act of applying an overpayment 
        (in whole or in part) against an obligation which has become 
        due to discharge, cancel or reduce the obligation;
            ``(23) `order to pay' means a written order issued by the 
        Secretary or the United States which--
                    ``(A) asserts a definite and quantified obligation 
                due the Secretary or the United States; and
                    ``(B) specifically identifies the obligation by 
                lease, production month and amount of such obligation 
                ordered to be paid, as well as the reason or reasons 
                such obligation is claimed to be due,
        but such term does not include any other communication by or on 
        behalf of the Secretary or the United States;
            ``(24) `overpayment' means any payment (including any 
        estimated royalty payment) by a lessee or by any person acting 
        on behalf of a lessee in excess of an amount legally required 
        to be paid on an obligation;
            ``(25) `payment' means satisfaction, in whole or in part, 
        of an obligation due the Secretary or the United States;
            ``(26) `penalty' means a statutorily authorized civil fine 
        levied or imposed by the Secretary or the United States for a 
        violation of this Act, a mineral leasing law, or a term or 
        provision of a lease administered by the Secretary;
            ``(27) `refund' means the return of an overpayment by the 
        Secretary or the United States by the drawing of funds from the 
        United States Treasury;
            ``(28) `underpayment' means any payment by a lessee or 
        person acting on behalf of a lessee that is less than the 
        amount legally required to be paid on an obligation; and
            ``(29) `United States' means--
                    ``(A) the United States Government and any 
                department, agency, or instrumentality thereof; and
                    ``(B) when such term is used in a geographic sense, 
                includes the several States, the District of Columbia, 
                Puerto Rico, and the territories and possessions of the 
                United States.''.

SEC. 3. LIMITATION PERIODS.

    (a) In General.--The Federal Oil and Gas Royalty Management Act of 
1982 (30 U.S.C. 1701 et seq.) is amended by adding after section 114 
the following new section:

``SEC. 115. LIMITATION PERIODS.

    ``(a) In General.--
            ``(1) Six-year period.--A judicial or administrative 
        proceeding which arises from, or relates to, an obligation may 
        not be commenced unless such proceeding is commenced within 6 
        years from the date on which such obligation becomes due.
            ``(2) Limit on tolling of limitation period.--The running 
        of the limitation period under paragraph (1) shall not be 
        suspended or tolled by any action of the United States or an 
        officer or agency thereof other than the commencement of a 
        judicial or administrative proceeding under paragraph (1) or an 
        agreement under paragraph (3).
            ``(3) Fraud or concealment.--For the purpose of computing 
        the limitation period under paragraph (1), there shall be 
        excluded therefrom any period during which there has been fraud 
        or concealment by a lessee in an attempt to defeat or evade 
        payment of any such obligation.
            ``(4) Reasonable period for providing information.--In 
        seeking information on which to base an order to pay, the 
        Secretary shall afford the lessee or person acting on behalf of 
        the lessee a reasonable period in which to provide such 
        information before the end of the period under paragraph (1).
    ``(b) Final Agency Action.--The Director of the Minerals Management 
Service shall issue a final Director's decision in any administrative 
proceeding before the Director within one year from the date such 
proceeding was commenced. The Secretary shall issue a final agency 
decision in any administrative proceeding within 3 years from the date 
such proceeding was commenced. If no such decision has been issued by 
the Director or Secretary within the prescribed time periods referred 
to above:
            ``(1) the Director's or Secretary's decision, as the case 
        may be, shall be deemed issued and granted in favor of the 
        lessee or lessees as to any nonmonetary obligation and any 
        obligation the principal amount of which is less than $2,500; 
        and
            ``(2) in the case of a monetary obligation the principal 
        amount of which is $2,500 or more, the Director's or 
        Secretary's decision, as the case may be, shall be deemed 
        issued and final, and the lessee shall have a right of de novo 
        judicial review and appeal of such final agency action.
    ``(c) Tolling by Agreement.--Prior to the expiration of any period 
of limitation under subsections (a) or (c), the Secretary and a lessee 
may consent in writing to extend such period as it relates to any 
obligation under the mineral leasing laws. The period so agreed upon 
may be extended by subsequent agreement or agreements in writing made 
before the expiration of the period previously agreed upon.
    ``(d) Limitation on Certain Actions by the United States.--When an 
action on or enforcement of an obligation under the mineral leasing 
laws is barred under subsection (a) or (b), the United States or an 
officer or agency thereof may 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, 
principal, interest, assessment, penalty or the initiation, pursuit or 
completion of an audit.
    ``(e) Obligation Becomes Due.--
            ``(1) In general.--For purposes of subsection (a), an 
        obligation becomes due when the right to enforce the obligation 
        is fixed.
            ``(2) Special rule regarding royalty obligation.--The right 
        to enforce any royalty obligation is fixed for the purposes of 
        this Act on the last day of the calendar month following the 
        month in which oil or gas is produced, except that with respect 
        to any such royalty obligation which is altered by a 
        retroactive redetermination of working interest ownership 
        pursuant to a unit or communitization agreement, the right to 
        enforce such royalty obligation in such amended unit or 
        communitization agreement is fixed for the purposes of this Act 
        on the last day of the calendar month in which such 
        redetermination is made. The Secretary shall issue any such 
        redetermination within 180 days of receipt of a request for 
        redetermination.
    ``(f) Judicial Review of Administrative Proceedings.--In the event 
an administrative proceeding subject to subsection (a) is timely 
commenced and thereafter the limitation period in subsection (a) lapses 
during the pendency of the administrative proceeding, no party to such 
administrative proceeding shall be barred by this section from 
commencing a judicial proceeding challenging the final agency action in 
such administrative proceeding so long as such judicial proceeding is 
commenced within 90 days from receipt of notice of the final agency 
action.
    ``(g) Implementation of Final Decision.--In the event a judicial or 
administrative proceeding subject to subsection (a) is timely commenced 
and thereafter the limitation period in subsection (a) lapses during 
the pendency of such proceeding, any party to such proceeding shall not 
be barred from taking such action as is required or necessary to 
implement the final unappealable judicial 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 refund, credit or offset.
    ``(h) Stay of Payment Obligation Pending Review.--Any party ordered 
by the Secretary or the United States to pay any obligation (including 
any interest, assessment or penalty) shall be entitled to a stay of 
such payment without bond or other surety pending administrative or 
judicial review unless the Secretary demonstrates that such party is or 
may become financially insolvent or otherwise unable to pay the 
obligation, in which case the Secretary may require a bond or other 
surety satisfactory to cover the obligation.
    ``(i) Inapplicability of the Other Statutes of Limitation.--The 
limitations set forth in sections 2401, 2415, 2416, and 2462 of title 
28, United States Code, section 42 of the Mineral Leasing Act (30 
U.S.C. 226-2), and section 3716 of title 31, United States Code, shall 
not apply to any obligation to which this Act applies.''.
    (b) Clerical Amendment.--The table of contents in section 1 of such 
Act (30 U.S.C. 1701) is amended by adding after the item relating to 
section 114 the following new item:

``Sec. 115. Limitation period.''.
SEC. 4. OVERPAYMENTS: OFFSETS AND REFUNDS.

    (a) In General.--The Federal Oil and Gas Royalty Management Act of 
1982 (30 U.S.C. 1701 et seq.) is amended by adding after section 111 
the following new section:

``SEC. 111A. OVERPAYMENTS: OFFSETS AND REFUNDS.

    ``(a) Offsets.--
            ``(1) Manner.--For each reporting month, a lessee or person 
        acting on behalf of a lessee shall offset all underpayments and 
        overpayments made for that reporting month for all leases 
        within the same royalty distribution category established under 
        permanent indefinite appropriations.
            ``(2) Offset against obligations.--The net overpayment 
        resulting within each category from the offsetting described in 
        paragraph (1) may be offset and credited against any obligation 
        for current or subsequent reporting months which have become 
        due on leases within the same royalty distribution category.
            ``(3) Prior approval not required.--The offsetting or 
        crediting of any overpayment, in whole or part, shall not 
        require the prior request to or approval by the Secretary.
            ``(4) Exclusion of certain under- and overpayments.--Any 
        underpayment or overpayment upon which an order has been issued 
        which is
         subject to appeal shall be excluded from the offsetting 
provisions of this section.
    ``(b) Refunds.--
            ``(1) In general.--A refund request may be made to the 
        Secretary not before one-year after the subject reporting 
        month. After such one-year period and when a lessee or a person 
        acting on behalf of a lessee has made a net overpayment to the 
        Secretary or the United States and has offset or credited in 
        accordance with subsection (a), the Secretary shall, upon 
        request, refund to such lessee or person the net overpayment, 
        with accumulated interest thereon determined in accordance with 
        section 111. If for any reason, a lessee or person acting on 
        behalf of a lessee is no longer accruing obligations on any 
        lease within a category, then such lessee or person may 
        immediately file a request for a refund of any net overpayment 
        and accumulated interest.
            ``(2) Request.--The request for refund is sufficient if 
        it--
                    ``(A) is made in writing to the Secretary;
                    ``(B) identifies the person entitled to such 
                refund; and
                    ``(C) provides the Secretary information that 
                reasonably enables the Secretary to identify the 
                overpayment for which such refund is sought.
            ``(3) Treatment as written request or demand.--Service of a 
        request for refund shall be a `written request or demand' 
        sufficient to commence an administrative proceeding.
            ``(4) Payment by secretary of the treasury.--The Secretary 
        shall certify the amount of the refund to be paid under 
        paragraph (1) to the Secretary of the Treasury who is 
        authorized and directed to make such refund.
            ``(5) Payment period.--A refund under this subsection shall 
        be paid within 90 days of the date on which the request for 
        refund was received by the Secretary.
    ``(c) Limitation on Offsets and Refunds.--
            ``(1) Limitation period for offsets and refunds.--Except as 
        provided by paragraph (2), a lessee or person acting on behalf 
        of a lessee may not offset or receive a refund of any 
        overpayment which arises from or relates to an obligation 
        unless such offset or refund request is initiated within six 
        years from the date on which the obligation which is the 
        subject of the overpayment became due.
            ``(2) Exception.--(A) For any overpayment the recoupment of 
        which (in whole or in part) by offset or refund, or both, may 
        occur beyond the six-year limitation period provided in 
        paragraph (1), where the issue of whether an overpayment 
        occurred has not been finally determined, or where recoupment 
        of the overpayment has not been accomplished within said six-
        year period, the lessee or person acting on behalf of a lessee 
        may preserve its right to recover or recoup the overpayment 
        beyond the limitation period by filing a written notice of the 
        overpayment with the Secretary within the six-year period.
            ``(B) Notice under subparagraph (A) shall be sufficient if 
        it--
                    ``(i) identifies the person who made such 
                overpayment;
                    ``(ii) asserts the obligation due the lessee or 
                person; and
                    ``(iii) identifies the obligation by lease, 
                production month and amount, as well as the reason or 
                reasons such overpayment is due.
    ``(d) Prohibition Against Reduction of Refunds or Offsets.--In no 
event shall the Secretary directly or indirectly claim any amount or 
amounts against, or reduce any offset or refund (or interest accrued 
thereon) by, the amount of any obligation the enforcement of which is 
barred by section 115.''.
    (b) Clerical Amendment.--The table of contents in section 1 of such 
Act (30 U.S.C. 1701) is amended by adding after the item relating to 
section 111 the following new item:

``Sec. 111A. Overpayments: offsets and refunds.''.
SEC. 5. REQUIRED RECORDKEEPING.

    Section 103 of the Federal Oil and Gas Royalty Management Act of 
1982 (30 U.S.C. 1713(b)) is amended by adding at the end the following:
    ``(c) Records required by the Secretary for the purpose of 
determining compliance with an 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 
six years after an obligation becomes due unless the Secretary 
commences a judicial or administrative proceeding with respect to an 
obligation within the time period prescribed by section 115 in which 
such records may be relevant. In that event, the Secretary may direct 
the record holder to maintain such records until the final 
nonappealable decision in such judicial or administrative proceeding is 
rendered. Under no circumstance shall a record holder be required to 
maintain or produce any record covering a time period for which a 
substantive claim with respect to an obligation to which the record 
relates would be barred by the applicable statute of limitation in 
section 115.''.

SEC. 6. ROYALTY INTEREST, PENALTIES, AND PAYMENTS.

    (a) Interest Charged on Late Payments and Underpayments.--Section 
111(a) of the Federal Oil and Gas Royalty Management Act of 1982 (30 
U.S.C. 1721(a)) is amended to read as follows:
    ``(a) 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 
a net late payment or underpayment at the rate published by the 
Department of the Treasury as the Treasury Current Value Of Funds Rate. 
The Secretary may waive or forego such interest in whole or in part. In 
the case of a net underpayment for a given reporting month, interest 
shall be computed and charged only on the amount of the net 
underpayment and not on the total amount due from the date of the net 
underpayment. The net underpayment is determined by offsetting in the 
same manner as required under paragraphs (1) and (2) of section 
111A(a). Interest may only be billed by the Secretary for any net 
underpayment not less than one year following the subject reporting 
month.''.
    (b) Charge on Late Payment Made by the Secretary.--Section 111(b) 
of the Federal Oil and Gas Royalty Management Act of 1982 (30 U.S.C. 
1721(b)) is amended to read as follows:
    ``(b) Any payment made by the Secretary to a State under section 35 
of the Mineral Leasing Act, and any other payment made by the Secretary 
which is not paid on the date required under such section 35, shall 
include an interest charge computed at the rate published by the 
Department of the Treasury as the Treasury Current Value of Funds Rate. 
The Secretary shall not be required to pay interest under this 
paragraph until collected or when such interest has been waived or is 
otherwise not collected. With respect to any obligation, the Secretary 
may waive or forgo interest otherwise required under section 3717 of 
title 31, United States Code.''.
    (c) Period.--Section 111(f) of the Federal Oil and Gas Royalty 
Management Act of 1982 (30 U.S.C. 1721(f)) is amended to read as 
follows:
    ``(f) Unless waived or not collected pursuant to subsections (a)(2) 
and (b)(2), interest shall be charged under this section only for the 
number of days a payment is late.''.
    (d) Lessee Interest.--Section 111 of the Federal Oil and Gas 
Royalty Management Act of 1982 (30 U.S.C. 1721) is amended by adding 
the following after subsection (g):
    ``(h) If a net overpayment, as determined by offsetting as required 
under section 111A (1) and (2) for a reporting month, interest shall be 
allowed and paid or credited on such net overpayment, with such 
interest to accrue from the date such net overpayment was made, at the 
rate published by the Department of the Treasury as the Treasury 
Current Value of Funds Rate.''.
    (e) Payment Exception for Minimal Production.--Section 111 of the 
Federal Oil and Gas Royalty Management Act of 1982 (30 U.S.C. 1721) is 
amended by adding the following after subsection (h):
    ``(i) For any well on a lease which produces on average less than 
250 thousand cubic feet of gas per day or 25 barrels of oil per day, 
the royalty on the actual or allocated lease production may be paid--
            ``(1) for a 12-month period, only based on actual 
        production removed or sold from the lease; and
            ``(2) 6 months following such period, for additional 
        production allocated to the lease during the period.
No interest shall be allowed or accrued on any underpayment resulting 
from this payment methodology until the month following the applicable 
12-month period.''.

SEC. 7. LIMITATION ON ASSESSMENTS.

    Section 111 of the Federal Oil and Gas Royalty Management Act of 
1982 (30 U.S.C. 1721) is amended by adding the following after 
subsection (i):
    ``(j) The Secretary may levy or impose an assessment upon any 
person not to exceed $250 for any reporting month for the inaccurate 
reporting of information required under subsection (k). No assessment 
may be levied or imposed upon any person for any underpayment, late 
payment, or estimated payment or for any erroneous or incomplete 
royalty or production related report for information not required by 
subsection (k) absent a showing of gross negligence or willful 
misconduct.''.

SEC. 8. COST-EFFECTIVE AUDIT AND COLLECTION REQUIREMENTS.

    Section 101 of the Federal Oil and Gas Royalty Management Act of 
1982 (30 U.S.C. 1701 et seq.) is amended by adding the following after 
subsection (c):
    ``(d)(1) If the Secretary determines that the cost of accounting 
for and collecting of any obligation due for any oil or gas production 
exceeds or is likely to exceed the amount of the obligation to be 
collected, the Secretary shall waive such obligation.
    ``(2) The Secretary shall develop a lease level reporting and audit 
strategy which eliminates multiple or redundant reporting of 
information.
    ``(3) In carrying out this section, for onshore production from any 
well which is less than 250 thousand cubic feet of gas per day or 25 
barrels of oil per day, or for offshore production for any well less 
than 1,500,000 cubic feet of gas per day or 150 barrels of oil per day, 
the Secretary shall only require the lessee to submit the information 
described in section 111(k). For such onshore and offshore production, 
the Secretary shall not conduct royalty reporting compliance and 
enforcement activities, levy or impose assessments described in such 
section 111(k) and shall not bill for comparisons between royalty 
reporting and production information. The Secretary may only conduct 
audits on such leases if the Secretary has reason to believe that the 
lessee has not complied with payment obligations for at least three 
months during a twelve month period. The Secretary shall not perform 
such audit if the Secretary determines that the cost of conducting the 
audit exceeds or is likely to exceed the additional royalties expected 
to be received as a result of such audit.''.
SEC. 9. ELIMINATION OF NOTICE REQUIREMENT.

    Section 23(a)(2) of the Outer Continental Shelf Lands Act (43 
U.S.C. 1349(a)(2)) is amended to read as follows:
    ``(2) Except as provided in paragraph (3) of this subsection, no 
action may be commenced under subsection (a)(1) of this section if the 
Attorney General has commenced and is diligently prosecuting a civil 
action in a court of the United States or a State with respect to such 
matter, but in any such action in a court of the United States any 
person having a legal interest which is or may be adversely affected 
may intervene as a matter of right.''.

SEC. 10. ROYALTY IN KIND.

    (a) In General.--Section 27(a)(1) of the Outer Continental Shelf 
Lands Act (43 U.S.C. 1353(a)(1)) and the first undesignated paragraph 
of section 36 of the Mineral Leasing Act (30 U.S.C. 192) are each 
amended by adding at the end the following: ``Any royalty or net profit 
share of oil or gas accruing to the United States under any lease 
issued or maintained by the Secretary for the exploration, production 
and development of oil and gas on Federal lands or the Outer 
Continental Shelf, at the Secretary's option, may be taken in kind at 
or near the lease upon 90 days prior written notice to the lessee. Once 
the United States has commenced taking royalty in kind, it shall 
continue to do so until 90 days after the Secretary has provided 
written notice to the lessee that it will resume taking royalty in 
value. Delivery of royalty in kind by the lessee shall satisfy in full 
the lessee's royalty obligation. Once the oil or gas is delivered in 
kind, the lessee shall not be subject to the reporting and 
recordkeeping requirements, including requirements under section 103, 
except for those reports and records necessary to verify the volume of 
oil or gas produced and delivered prior to or at the point of 
delivery.''.
    (b) Sale.--Section 27(c)(1) of the Outer Continental Shelf Lands 
Act (43 U.S.C. 1353(c)(1)) is amended by striking ``competitive bidding 
for not more than its regulated price, or if no regulated price 
applies, not less than its fair market value'' and inserting 
``competitive bidding or private sale''.

SEC. 11. TIME, MANNER, AND INFORMATION REQUIREMENTS FOR ROYALTY PAYMENT 
              AND REPORTING.

    Section 111 of the Federal Oil and Gas Royalty Management Act of 
1982 (30 U.S.C. 1721) is amended by adding the following after 
subsection (j):
    ``(k)(1) Any royalty payment on an obligation due the United States 
for oil or gas produced pursuant to an oil and gas lease administered 
by the Secretary shall be payable at the end of the month following the 
month in which oil or gas is removed or sold from such lease.
    ``(2) Royalty reporting with respect to any obligation shall be by 
lease and shall include only the following information:
            ``(A) identification of the lease;
            ``(B) product type;
            ``(C) volume (quantity) of such oil or gas produced;
            ``(D) quality of such oil or gas produced;
            ``(E) method of valuation and value, including deductions; 
        and
            ``(F) royalty due the United States.
    ``(3) Other than the reporting required under paragraph (2), the 
Secretary shall not require additional reports or information for 
production or royalty accounting, including (but not limited to) 
information or reports on allowances, payor information, selling 
arrangements, and revenue source.
    ``(4) No assessment may be imposed on a retroactive adjustment with 
respect to royalty information made on a net basis for reports 
described in paragraph (2).
    ``(5) The Secretary shall establish reporting thresholds for de 
minimis production, which is defined as less than 100 thousand cubic 
feet of gas per day or 10 barrels of oil per day per lease. For such de 
minimis production, the lessee shall report retroactive adjustments 
with the current month royalty payment, and the Secretary shall not 
bill for, or collect, comparisons to production, assessments, or 
interest.
    ``(6) If the deadline for tendering a royalty payment imposed by 
paragraph (1) cannot be met for one or more leases, an estimated 
royalty payment in the approximate amount of royalties that would 
otherwise be due may be made by a lessee or person acting on behalf of 
a lessee for such leases to avoid late payment interest charges. When 
such estimated royalty payment is established, actual royalties become 
due at the end of the second month following the month the production 
was removed or sold for as long as the estimated balance exists. Such 
estimated royalty payment may be carried forward and not reduced by 
actual royalties paid. Any estimated balance may be adjusted, recouped, 
or reinstated, at any time. The requirements of paragraph (2) shall not 
apply to any estimated royalty payment.''.

SEC. 12. REPEALS.

    (a) FOGRMA.--Section 307 of the Federal Oil and Gas Royalty 
Management Act of 1982 (30 U.S.C. 1755), is repealed. Section 1 of such 
Act (relating to the table of contents) is amended by striking out the 
item relating to section 307.
    (b) OCSLA.--Effective on the date of the enactment of this Act, 
section 10 of the Outer Continental Shelf Lands Act (43 U.S.C. 1339) is 
repealed.

SEC. 13. INDIAN LANDS.

    The amendments made by this Act shall not apply with respect to 
Indian lands, and the provisions of the Federal Oil and Gas Royalty 
Management Act of 1982 as in effect on the day before the date of 
enactment of this Act shall apply after such date only with respect to 
Indian lands.

SEC. 14. EFFECTIVE DATE.

    This Act, and the amendments made by this Act, shall take effect on 
the date of the enactment of this Act with respect to any obligation 
which becomes due on or after such date of enactment.
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