[Federal Register Volume 59, Number 212 (Thursday, November 3, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-27305]


[[Page Unknown]]

[Federal Register: November 3, 1994]


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DEPARTMENT OF ENERGY
 

Implementation of Special Refund Procedures

AGENCY: Office of Hearings and Appeals, Department of Energy.

ACTION: Notice of Implementation of Special Refund Procedures.

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SUMMARY: The Office of Hearings and Appeals (OHA) of the Department of 
Energy (DOE) announces the proposed procedures for disbursement of the 
total amount of $5,982.32 in crude oil overcharges obtained by the DOE 
under the terms of a Remedial Order that DOE issued to Doma Corporation 
(DOMA) and Don Martin (Martin), Case No. LEF-0049. OHA has determined 
that the funds obtained from DOMA and Martin, plus accrued interest, 
will be distributed in accordance with DOE's Modified Statement of 
Restitutionary Policy in Crude Oil Cases.

FOR FURTHER INFORMATION CONTACT: Thomas L. Wieker, Deputy Director, 
Office of Hearings and Appeals, 1000 Independence Avenue, S.W., 
Washington, D.C. 20585, (202) 586-2400.

SUPPLEMENTARY INFORMATION: In accordance with 10 CFR 205.282(c), notice 
is hereby given of the issuance of the Decision and Order set out 
below. The Decision sets forth the procedures that DOE has formulated 
to distribute to eligible claimants $5,982.32, plus accrued interest, 
obtained under the terms of a Remedial Order that DOE issued to Doma 
Corporation and Don Martin on July 25, 1985. The Remedial Order found 
that Doma Corporation and its President, Don Martin, both violated 
provisions of the Federal petroleum price and allocation regulations 
involving the sale of crude oil during the period of November 1973 
through June 1977.
    OHA will distribute the Remedial Order funds in accordance with 
DOE's Modified Statement of Restitutionary Policy in Crude Oil Cases 
(the MSRP). 51 FR 27899 (August 4, 1986). Under the MSRP, crude oil 
overcharge monies are divided between the Federal government, the 
states, and injured purchasers of refined petroleum products. Refunds 
to the states are distributed in proportion to each state's consumption 
of petroleum products during the price control period. Refunds to 
eligible purchasers are based on the total volume of petroleum products 
purchased and the degree to which they can demonstrate injury.
    Because the June 30, 1994 deadline for crude oil refund 
applications has passed, no new applications for purchasers of refined 
petroleum products will be accepted for these funds. Instead, the share 
allocated to these purchasers will be added to the general crude oil 
overcharge pool used for direct restitution.

    Dated: October 27, 1994.
George B. Breznay,
Director, Office of Hearings and Appeals.

Decision and Order of the Department of Energy

Implementation of Special Refund Procedures

October 27, 1994.
Name of Firm: Doma Corporation and Don Martin
Date of Filing: September 17, 1992
Case Number: LEF-0049
    This Decision and Order considers a Petition for the 
Implementation of Special Refund Procedures (Petition) filed by the 
Economic Regulatory Administration (ERA) for crude oil overcharge 
funds. Under the procedural regulations of the Department of Energy 
(DOE), ERA may request that the Office of Hearings and Appeals (OHA) 
formulate and implement special refund procedures. See Petition for 
Implementation of Special Refund Procedures, 10 CFR 205.281. These 
procedures are used to refund monies to those persons who were 
injured by actual or alleged violations of the DOE price 
regulations. We have considered ERA's September 17, 1992, request to 
implement Subpart V procedures with respect to the monies received 
from Doma Corporation (DOMA) and Don Martin (Martin) and have 
determined that such procedures are appropriate.
    The Petition filed by ERA seeks to implement special refund 
procedures for monies that were remitted by DOMA and Martin pursuant 
to Final Remedial Order No. HRO-0209 (the Order) issued on July 25, 
1985, by OHA. Under this Order, DOMA and Martin were found to have 
violated provisions of the Federal petroleum price and allocation 
regulations during the period November 1973 through June 1977 (the 
audit period). A total amount of $5,982.32 has been remitted to the 
DOE.1 This Decision and Order sets forth OHA's plan to 
distribute these funds.
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    \1\The alleged violations referred to in this Proposed Decision 
and Order involve the sales of both crude oil and refined petroleum 
products. However, in view of the size of the payment and the fact 
that most of the overcharges relate to crude oil, the OHA has 
determined that the interests of administrative efficiency would 
best be served by considering all monies received to be the result 
of crude oil violations.
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I. Background

    DOMA was incorporated in the state of Texas on May 31, 1973, and 
was headed by Don Martin, President. Its crude oil trading 
activities, during the audit period, were based in Abilene, Texas 
and consisted primarily of purchasing and reselling crude oil 
(without substantially changing its form) to purchasers other than 
ultimate consumers. DOMA was, therefore, a reseller as that term is 
defined at 10 CFR 212.31.
    On June 13, 1979, ERA issued a Notice of Probable Violation 
(NOPV) alleging that during the audit period DOMA committed 
violations of DOE regulations in its sales of crude oil. On February 
7, 1984, ERA issued an Amended Proposed Remedial Order (APRO) Case 
No. 6A0X00111. The APRO alleged that both DOMA and Martin charged 
prices in excess of the maximum legal selling price; purchased 
uncertified barrels of bottoms oil and sold them as new or stripper 
oil; and miscertified various petroleum products as new or stripper 
crude oil in violation of the following statutory provisions: 10 CFR 
205.202, 210.62(c), 212.10, .93, .131.
    This Office issued the APRO as a Final Remedial Order to DOMA 
and Martin on July 25, 1985. See Final Remedial Order at 29. DOMA 
and Martin have remitted $5,982.32, plus interest, to the Office of 
Controller, of the Department of Energy. These funds are available 
for distribution through Subpart V and currently are being held in 
an interest-bearing escrow account maintained at the Department of 
the Treasury pending a determination regarding their proper 
distribution.

II. Jurisdiction and Authority

    The general guidelines that govern OHA's ability to formulate 
and implement a plan to distribute refunds are set forth at 10 CFR 
Part 205, Subpart V. These procedures apply in situations where DOE 
cannot readily identify the persons who were injured as a result of 
actual or alleged violations of the regulations or ascertain the 
amount of the refund each person should receive. For a more detailed 
discussion of Subpart V and the authority of OHA to fashion 
procedures to distribute refunds, see Office of Enforcement, 9 DOE 
82,508 (1981) and Office of Enforcement, 8 DOE 82,597 (1981).

III. The Crude Oil Refund Procedures

A. Crude Oil Refund Policy

    The monies remitted by DOMA and Martin will be distributed in 
accordance with DOE's Modified Statement of Restitutionary Policy in 
Crude Oil Cases (MSRP). See 51 FR 27899 (August 4, 1986). This 
policy has been utilized in all Subpart V proceedings involving 
alleged crude oil violations. See Order Implementing the MSRP, 51 FR 
29689 (August 20, 1986) (the August 1986 Order).
    Under the MSRP, 40 percent of the crude oil overcharge funds 
will be refunded to the federal government, another 40 percent to 
the states, and up to 20 percent may initially be reserved for the 
payment of claims by injured parties. The MSRP also specified that 
any monies remaining after all valid claims by injured purchasers 
are paid will be disbursed to the federal government and the states 
in equal amounts. See, In re: The Department of Energy Stripper Well 
Exemption Litigation, 653 F. Supp. 108 (D. Kan.), 6 Fed. Energy 
Guidelines 90,509 (1986) (the Stripper Well Settlement Agreement) 
for a more detailed discussion of the MSRP.
    On April 10, 1987, the OHA issued a Notice analyzing the 
numerous comments received in response to the August 1986 Order. 52 
FR 11737 (April 10, 1987) (the April 10 Notice). This Notice 
provided guidance to claimants that anticipated filing refund 
applications for crude oil monies under the Subpart V regulations. 
In general, we stated that all claimants would be required to (1) 
document their purchase volumes of petroleum products during the 
August 19, 1973 through January 27, 1981, crude oil price control 
period; and (2) prove they were injured by the alleged crude oil 
overcharges. End-users of petroleum products whose businesses are 
unrelated to the petroleum industry would be presumed to have been 
injured by the alleged crude oil overcharges and would not be 
required to submit proof of injury. See City of Columbus, Georgia, 
16 DOE 85,550 (1987).

B. The Proposed Decision and Order

    On November 12, 1992, OHA issued a Proposed Decision and Order 
(PDO) establishing tentative procedures to distribute the crude oil 
violation amount that had been obtained from DOMA and Martin. The 
amount of money covered by the PDO is $5,982.32, plus accrued 
interest. OHA tentatively concluded that the funds should be 
distributed in accordance with the MSRP and the April Notice. 
Pursuant to the MSRP, OHA proposed to reserve 20 percent of these 
funds ($1,196) for direct refunds to applicants who claim that they 
were injured by the crude oil violations. We stated that the 
remaining 80 percent of the funds would be distributed to the states 
and the federal government for indirect restitution. After all valid 
claims have been paid, any remaining funds in the claim reserve 
would also be divided between the states and the federal government. 
The federal government's share ultimately would be deposited into 
the general fund of the Treasury.
    The PDO proposes evaluating claims for the DOMA and Martin crude 
oil refund proceeding in exactly the same manner as OHA has 
evaluated claims submitted in other crude oil proceedings. Claimants 
generally will be required to document their purchase volumes of 
petroleum products and prove that they were injured as a result of 
the alleged violations. The PDO proposed that the refunds be 
calculated on the basis of a volumetric refund amount which has been 
calculated in accordance with the description in the April Notice. 
We further stated that the crude oil overcharges were presumed to 
have been absorbed, rather than passed on, by applicants who were 
(1) end-users of petroleum products, (2) unrelated to the petroleum 
industry, and (3) not subject to the regulations promulgated under 
the Emergency Petroleum Price and Allocation Act of 1973 (EPAA), 15 
U.S.C. 751-760h. In order to receive a refund, end-user claimants 
need not submit any evidence of injury. See Shell, 17 DOE at 88,406.
    We provided a period of 30 days from the date of the PDO's 
publication in the Federal Register in which the public could submit 
comments regarding the tentative refund procedures. More than 30 
days have elapsed, and OHA has received no comments concerning the 
proposed procedures. Accordingly, the OHA will finalize the PDO as 
set forth below.
    Under the terms of the MSRP, 80 percent of the crude oil 
violation amounts subject to this Decision or $4,785.86 in 
principal, plus accrued interest, should be disbursed in equal 
shares to the states and federal government for indirect 
restitution. Accordingly, we will direct the DOE's Office of the 
Controller to transfer one-half of that amount, or $2,393.00, plus 
interest, into an interest bearing subaccount for the states, and 
one-half, or $2,393.00, plus interest, into an interest bearing 
subaccount for the federal government. In accordance with previous 
practice, when the amount available for distribution to the states 
reaches $10 million, we will direct the DOE's Office of the 
Controller to make the appropriate disbursement to the individual 
states. Refunds to the states will be in proportion to the 
consumption of petroleum products in each state during the period of 
price controls. The share or ratio of the funds allocated to each 
state is contained in Exhibit H of the Stripper Well Agreement. When 
disbursed, these funds will be subject to the same limitations and 
reporting requirements that apply to any other crude oil funds 
received by the states in accordance with the Stripper Well 
Agreement.
    We must also determine the appropriate method for disbursing the 
20 percent of the fund available for direct restitution ($1,196). 
The application period for crude oil overcharge refunds ended on 
June 30, 1994. As we discussed in King Petroleum, Inc., Case No. 
LEF-0125, August 8, 1994 (Proposed Decision and Order), we will not 
hold a separate refund proceeding for monies that become available 
for direct restitution after the June 30, 1994 closing date. 59 Fed. 
Reg. 41755 (August 15, 1994). Therefore, the funds in this case 
($1,196) will be added to the general crude oil overcharge pool for 
direct restitution to those applicants who applied by the June 30, 
1994 deadline.
    It Is Therefore Ordered That:
    (1) The Director of Special Accounts and Payroll, Office of 
Departmental Accounting and Financial Systems Development, Office of 
the Controller, Department of Energy, shall take all steps necessary 
to transfer $5,982.32, plus accrued interest, from the DOMA and 
Martin escrow account Number 6A0X00111Z, as specified in Paragraphs 
(2), (3) and (4) of this Decision.
    (2) The Director of Special Accounts and Payroll shall transfer 
$2,393, plus accrued interest, of the funds referenced in Paragraph 
(1) above, into the subaccount denominated ``Crude Tracking-
States,'' Number 999DOE003W.
    (3) The Director of Special Accounts and Payroll shall transfer 
$2,393, plus accrued interest, of the funds referenced in Paragraph 
(1) above, into the subaccount denominated ``Crude Tracking-
Federal,'' Number 999DOE002W.
    (4) The Director of Special Accounts and Payroll shall transfer 
$1,196, plus accrued interest, of the funds referenced in Paragraph 
(1) above, into the subaccount denominated ``Crude Tracking-
Claimants 4,'' Number 999DOE0010Z.
    (5) This is a final Order of the Department of Energy.

    Dated: October 27, 1994.
George B. Breznay,
Director, Office of Hearings and Appeals.
[FR Doc. 94-27305 Filed 11-2-94; 8:45 am]
BILLING CODE 6450-01-P