[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1269 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 1269

  To amend the Federal Oil and Gas Royalty Management Act of 1982 to 
strengthen sanctions for violations of that Act relating to oil or gas 
                               royalties.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 24, 1999

     Mr. George Miller of Califronia (for himself and Mr. DeFazio) 
 introduced the following bill; which was referred to the Committee on 
                               Resources

_______________________________________________________________________

                                 A BILL


 
  To amend the Federal Oil and Gas Royalty Management Act of 1982 to 
strengthen sanctions for violations of that Act relating to oil or gas 
                               royalties.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Federal Oil and Gas Reform Act of 
1999''.

SEC. 2. SANCTIONS FOR VIOLATIONS RELATING TO FEDERAL OIL AND GAS 
              ROYALTIES.

    Section 109 of the Federal Oil and Gas Royalty Management Act of 
1982 (30 U.S.C. 1719) is amended to read as follows:

                           ``civil penalties

    ``Sec. 109. (a) Royalty Violations.--(1) No person shall--
            ``(A) after due notice of violation or after such violation 
        has been reported under paragraph (3)(A), fail or refuse to 
        comply with any requirement of any mineral leasing law or any 
        regulation, order, lease, or permit under such a law;
            ``(B) fail or refuse to make any royalty payment in the 
        amount or value required by any mineral leasing law or any 
        regulation, order, or lease under such a law;
            ``(C) fail or refuse to make any royalty payment by the 
        date required by any mineral leasing law or any regulation, 
        order, or lease under such a law; or
            ``(D) prepare, maintain, or submit any false, inaccurate, 
        or misleading report, notice, affidavit, record, data, or other 
        written information or filing related to royalty payments that 
        is required under any mineral leasing law or regulation issued 
        under any mineral leasing law.
    ``(2) A person who violates paragraph (1) shall be liable--
            ``(A) in the case of a violation of subparagraph (B) or (C) 
        of paragraph (1) for an amount equal to 3 times the royalty the 
        person fails or refuses to pay, plus interest on that trebled 
        amount measured from the first date the royalty payment was 
        due; and
            ``(B) in the case of any violation, for a civil penalty of 
        $25,000 per violation for each day the violation continues.
    ``(3) Paragraph (2) shall not apply to a violation of paragraph (1) 
if the person who commits the violation, within 30 days of the 
violation--
            ``(A) reports the violation to the Secretary or a 
        representative designated by the Secretary; and
            ``(B) corrects the violation.
    ``(b) Lease Administration Violations.--Any person who--
            ``(1) fails to notify the Secretary of--
                    ``(A) any designation by the person under section 
                102(a); or
                    ``(B) any other assignment of obligations or 
                responsibilities of the person under a lease;
            ``(2) fails or refuses to permit--
                    ``(A) lawful entry;
                    ``(B) inspection, including any inspection 
                authorized by section 108; or
                    ``(C) audit, including any failure or refusal to 
                promptly tender requested documents;
            ``(3) fails or refuses to comply with subsection 102(b)(3) 
        (relating to notification regarding beginning or resumption of 
        production); or
            ``(4) fails to correctly report and timely provide 
        operations or financial records necessary for the Secretary or 
        any authorized designee of the Secretary to accomplish lease 
        management responsibilities,
shall be liable for a penalty of up to $10,000 per violation for each 
day such violation continues.
    ``(c) Theft.--Any person who--
            ``(1) 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
            ``(2) 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 without correction.
    ``(d) Repeated Violations.--(1)(A) If the Secretary or an 
authorized designee of the Secretary determines that any person has 
repeatedly violated subsection (a), (b), or (c), the Secretary or 
designee shall notify the person of the violation and demand 
compliance.
    ``(B) A person notified pursuant to subparagraph (A) shall correct 
the violations by not later than 30 calendar days after the date of the 
notification.
    ``(C) Any person who fails to comply with a demand under 
subparagraph (A) shall be liable to the United States for a civil 
penalty equal to 3 times the amount of any civil penalty that otherwise 
applies under subsection (a), (b), or (c) to the violations to which 
the demand relates.
    ``(2) In addition to the penalty provided in paragraph (1)(C), if 
the Secretary determines that any person has repeatedly violated 
subsection (a), (b), or (c) or any lease management order, the 
Secretary may--
            ``(A) shut in and cease production of any oil or gas lease 
        held by the person;
            ``(B) prohibit the person--
                    ``(i) from acquiring any additional oil or gas 
                lease, including by transfer or assignment; and
                    ``(ii) from being designated under section 102(a) 
                to make payments due under any lease;
            ``(C) cancel or transfer any interest in an oil or gas 
        lease held by the person; and
            ``(D) collect from the person reimbursement, including 
        interest, of all costs of release, transfer, or reclamation of 
        lease sites canceled or transferred, including costs of 
        disposing of lease property, facilities, and equipment.
    ``(e) Administrative Appeal.--(1) Any determination by the 
Secretary or a designee of the Secretary of the amount of any royalties 
or civil penalties owed under subsection (a), (b), (c), or (d) shall be 
final, unless within 15 days after notification by the Secretary or 
designee the person liable for such amount files an administrative 
appeal in accordance with regulations issued by the Secretary.
    ``(2) If a person files an administrative appeal pursuant to 
paragraph (1), the Secretary or designee shall make a final 
determination in accordance with the regulations referred to in 
paragraph (1).
    ``(f) Deduction.--The amount of any penalty under this section, as 
finally determined may be deducted from any sums owing by the United 
States to the person charged.
    ``(g) Compromise and Reduction.--On a case-by-case basis the 
Secretary may compromise or reduce civil penalties under this section.
    ``(h) Notice.--Notice under this subsection (a) shall be by 
personal service by an authorized representative of the Secretary or by 
registered mail. Any person may, in the manner prescribed by the 
Secretary, designate a representative to receive any notice under this 
subsection.
    ``(i) Record of Determination.--In determining the amount of such 
penalty, or whether it should be remitted or reduced, and in what 
amount, the Secretary shall state on the record the reasons for his 
determinations.
    ``(j) Judicial Review.--Any person who has requested a hearing in 
accordance with subsection (e) within the time the Secretary has 
prescribed for such a hearing and who is aggrieved by a final order of 
the Secretary 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.--If any person fails to pay an assessment of 
a civil penalty under this Act--
            ``(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) Relationship to Mineral Leasing Act.--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 31 of the Mineral Leasing Act.
    ``(m) Tolling of Statutes of Limitation.--(1) Any determination by 
the Secretary or a designee of the Secretary that a person has violated 
subsection (a), (b)(2), or (b)(4) shall toll any applicable statute of 
limitations for all oil and gas leases held or operated by such person, 
until the later of--
            ``(A) the date on which the person corrects the violation 
        and certifies that all violations of a like nature have been 
        corrected for all of the oil and gas leases held or operated by 
        such person; or
            ``(B) the date a final, nonappealable order has been issued 
        by the Secretary or a court of competent jurisdiction.
    ``(2) A person determined by the Secretary or a designee of the 
Secretary to have violated subsection (a), (b)(2), or (b)(4) shall 
maintain all records with respect to the person's oil and gas leases 
until the later of--
            ``(A) the date the Secretary releases the person from the 
        obligation to maintain such records; and
            ``(B) the expiration of the period during which the records 
        must be maintained under section 103(b).
    ``(n) State Sharing of Penalties.--Amounts received by the United 
States in an action brought under section 3730 of title 31, United 
States Code, that arises from any underpayment of royalties owed to the 
United States under any lease shall be treated as royalties paid to the 
United States under that lease for purposes of the mineral leasing laws 
and the Land and Water Conservation Fund Act of 1965 (16 U.S.C. 460l-4 
et seq.).''.

SEC. 3. SHARED CIVIL PENALTIES.

    Section 206 of the Federal Oil and Gas Royalty Management Act of 
1982 (30 U.S.C. 1736) is amended--
            (1) by inserting ``trebled royalties or'' after ``50 per 
        centum of any'' and before ``civil penalty''; and
            (2) by striking the second sentence.
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