[Federal Register Volume 60, Number 25 (Tuesday, February 7, 1995)]
[Notices]
[Pages 7192-7195]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-3020]



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DEPARTMENT OF ENERGY

Implementation of Special Refund Procedures

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

[[Page 7193]] 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 procedures for disbursement of a total of 
$338,267.90, plus accrued interest, in crude oil overcharges obtained 
by the DOE from King Petroleum, Inc., et al., Case No. LEF-0125 (King), 
and Billy Bridewell, William J. Cobb, et al., Case No. LEF-0126 
(Bridewell). The OHA has determined that the funds obtained from King 
and Bridewell, plus accrued interest, will be distributed in accordance 
with the DOE's Modified Statement of Restitutionary Policy in Crude Oil 
Cases, 51 FR 27899 (August 4, 1986).

DATES AND ADDRESSES: Applications for Refund from the crude oil funds 
should be clearly labeled ``Application for Crude Oil Refunds'' and 
should be mailed to Subpart V Crude Oil Overcharge Refunds, Office of 
Hearings and Appeals, Department of Energy, 1000 Independence Avenue, 
S.W., Washington, D.C. 20585. Applications for Refund must be filed in 
duplicate no later than June 3, 1996. Any party who has previously 
filed an Application for Refund should not file another Application for 
Refund from the present crude oil funds. The previously filed crude oil 
application will be deemed filed in all crude oil proceedings as the 
procedures are finalized.

FOR FURTHER INFORMATION CONTACT:
Thomas O. Mann, Deputy Director, Roger Klurfeld, Assistant Director, 
Office of Hearings and Appeals, 1000 Independence Avenue, S.W., 
Washington, DC 20585 (202) 586-2094 (Mann); 586-2383 (Klurfeld).

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 and Order sets forth the procedures that the DOE 
has formulated to distribute a total of $338,267.90, plus accrued 
interest, remitted to the DOE by King Petroleum, Inc., et al., and 
Billy Bridewell, William J. Cobb, et al., to the DOE. The DOE is 
currently holding these funds in an interest bearing account pending 
distribution.
    The OHA will distribute these funds in accordance with the DOE's 
Modified Statement of Restitutionary Policy in Crude Oil Cases, 51 FR 
27899 (August 4, 1986) (the MSRP). Under the MSRP, crude oil overcharge 
monies are divided among the federal government, the states, and 
injured purchasers of refined petroleum products. Refunds to the states 
will be distributed in proportion to each state's consumption of 
petroleum products during the price control period. Refunds to eligible 
purchasers will be based on the volume of petroleum products that they 
purchased and the extent to which they can demonstrate injury.
    Applications for Refund must be postmarked no later than June 3, 
1996. As we state in the Decision, any party who has previously 
submitted a refund application in the crude oil proceedings should not 
file another Application for Refund. The previously filed crude oil 
application will be deemed filed in all crude oil proceedings as the 
proceedings are finalized.

    Dated: February 1, 1995.
George B. Breznay,
Director, Office of Hearings and Appeals.

Implementation of Special Refund Procedures

Names of Firms: King Petroleum, Inc., et al.; Billy Bridewell, 
William J. Cobb, et al.
Date of Filing: May 26, 1994
Case Numbers: LEF-0125; LEF-0126

    On May 26, 1994, the Economic Regulatory Administration (ERA) of 
the Department of Energy (DOE) filed a Petition for the 
Implementation of Special Refund Procedures with the Office of 
Hearings and Appeals (OHA), to distribute funds which King 
Petroleum, Inc., et al., (King) and Billy Bridewell, William J. 
Cobb, et al., (Bridewell) remitted to the DOE pursuant to 
settlements between the parties and the DOE. King has remitted a 
total of $1,245.04, while Bridewell has remitted a total of 
$337,022.86.
    In accordance with the procedural regulations codified at 10 
CFR. part 205, subpart V (Subpart V), the ERA requests in its 
Petition that the OHA establish special refund procedures to remedy 
the effects of any regulatory violations which were resolved by 
these settlements. This Decision and Order sets forth the OHA's 
final plan to distribute these funds.

I. Background

    On July 29, 1988, the DOE issued a Remedial Order to King for 
violations of the mandatory petroleum price and allocation 
regulations governing the resale of crude oil. Prior to the issuance 
of the Remedial Order, the parties filed in appropriate courts for 
protection under Chapter 7 of the U.S. Bankruptcy Code. Pursuant to 
the settlement of those proceedings, the DOE has collected a total 
of $1,245.04. These funds are being held in an interest-bearing 
escrow account maintained at the Department of the Treasury pending 
a determination regarding their proper disposition.
    On March 23, 1984, the DOE issued a Remedial Order to Bridewell 
for violations of the mandatory petroleum price and allocation 
regulations related to Bridewell's production and sale of crude oil 
during the period of November 16, 1973 through August 31, 1976. The 
matter was referred to the Department of Justice for enforcement in 
April 1976. On February 15, 1987, the parties entered into a 
Compromise Settlement Agreement to resolve all civil liability in 
this matter. Subsequently, several of the parties filed for 
protection with the U.S. Bankruptcy Court for Eastern Texas. The DOE 
has collected a total of $337,022.86 in settlement of this matter. 
These funds are being held in an interest-bearing account pending a 
determination regarding their proper disposition.

II. Jurisdiction and Authority

    The Subpart V regulations set forth general guidelines which may 
be used by the OHA in formulating and implementing a plan of 
distribution of funds received as a result of an enforcement 
proceeding. The DOE policy is to use the Subpart V process to 
distribute such funds. For a more detailed discussion of Subpart V 
and the authority of the OHA to fashion procedures to distribute 
refunds, see Petroleum Overcharge Distribution and Restitution Act 
of 1986, 15 U.S.C. 4501-07 (PODRA), Office of Enforcement, 9 DOE 
82,508 (1981), and Office of Enforcement, 8 DOE 82,597 (1981).

III. The Proposed Decision and Order

    We considered the ERA's Petition that we implement a Subpart V 
proceeding with respect to the King and Bridewell funds and 
determined that such a proceeding was appropriate. On August 8, 
1994, we issued a Proposed Decision and Order (PDO) setting forth 
the OHA's tentative plan to distribute these funds. See 59 FR 41755 
(August 15, 1994). In the PDO, we stated that the DOE had previously 
established June 30, 1994 as the final deadline for filing an 
Application for Refund from the crude oil funds. See 58 FR 26318 
(May 3, 1993). Since the PDO was issued after June 30, 1994, we 
proposed that we would accept no Applications for Refund for the 
King and Bridewell funds.
    Since the issuance of the Proposed Decision and Order, it has 
been decided to re-open the crude oil proceeding. See 59 FR 55656 
(November 8, 1994). The new closing date for this proceeding has 
been tentatively set for June 3, 1996. Id. Accordingly, we have 
decided that, contrary to the Proposed Decision and Order issued on 
August 15, 1994, we will accept Applications for Refund for the King 
and Bridewell funds in the manner set forth below.

IV. The Refund Procedures

A. Crude Oil Refund Policy

    We adopt the tentative determination of the PDO to distribute 
the funds obtained from King and Bridewell in accordance with the 
DOE's Modified Statement of Restitutionary Policy in Crude Oil 
Cases, 51 FR 27899 (August 4, 1986) (the MSRP). The MSRP was issued 
as a result of a court-approved Settlement Agreement. 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). The MSRP establishes that 40 
percent of the crude oil funds will be remitted to the federal 
government, another 40 percent to the states, and up to 20 percent 
may be initially reserved for payment of claims to injured parties. 
The MSRP also [[Page 7194]] specifies that any monies remaining 
after all valid claims by injured purchasers are paid be disbursed 
to the federal government and the states in equal amounts.
    The OHA has utilized the MSRP in all Subpart V proceedings 
involving alleged crude oil violations. See Order Implementing the 
MSRP, 51 FR 29689 (August 20, 1986). This Order provided a period of 
30 days for filing of comments or objections to our proposed use of 
the MSRP as the groundwork for evaluating claims in crude oil refund 
proceedings. Following this period, the OHA issued a Notice 
evaluating the numerous comments which it had received pursuant to 
the Order Implementing the MSRP. This notice was published at 52 FR 
11737 (April 10, 1987) (the April 10 Notice).
    The April 10 Notice contained guidance to assist potential 
claimants wishing to file refund applications for crude oil monies 
under the Subpart V regulations. Generally, 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) show that they were injured by the 
alleged crude oil overcharges. We also specified that end-users of 
petroleum products whose businesses were unrelated to the petroleum 
industry will be presumed to have been injured by the alleged crude 
oil overcharges. End-users, therefore, need only submit 
documentation of their purchase volumes. See City of Columbus, 
Georgia, 16 DOE 85,550 (1987). Additionally we stated that we would 
calculate crude oil refunds on a per gallon (or volumetric) basis. 
We obtained this figure by dividing the crude oil refund pool by the 
total consumption of petroleum products in the United States during 
the crude oil price control period. The OHA has adopted the refund 
procedures outlined in the April 10 Notice in numerous cases. See 
e.g., Shell Oil Co., 17 DOE 85,204 (1988) (Shell); Mountain Fuel 
Supply Co., 14 DOE 85,475 (1986) (Mountain Fuel).

B. Refund Claims

    These standard crude oil procedures will be used to distribute 
the monies in the King and Bridewell funds. We have chosen initially 
to reserve 20 percent of these funds, $67,653.38, plus accrued 
interest, for direct refunds to claimants in order to ensure 
sufficient funds will be available for injured parties. This reserve 
figure may later be reduced if circumstances warrant.
    The OHA will evaluate crude oil refund claims filed in this 
proceeding in a manner consistent with our previous crude oil refund 
proceedings under Subpart V. See Mountain Fuel, 14 DOE at 88,869. 
Claimants in this proceeding will be required to document their 
purchase volumes of petroleum products and prove that they were 
injured as a result of the overcharges.
    We adopt a presumption that the crude oil overcharges were 
absorbed, rather than passed on, by applicants which 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 Allocation Act of 1973 (EPAA), 15 U.S.C. 
751-760h. Under this presumption, end-user claimants need not submit 
evidence of injury, and may become eligible for a refund by simply 
documenting their purchase volumes. See Shell, 17 DOE at 88,406.
    Petroleum retailer, refiner, and reseller applicants must submit 
detailed documentation of injury. They may not rely upon the injury 
presumptions utilized in some refined products refund cases. Id. 
These applicants may, however, use econometric evidence of the type 
found in the OHA Report on Stripper Well Overcharges, 6 Fed. Energy 
Guidelines 90,507 (1985). See also PODRA Sec. 3003(b)(2), 15 U.S.C. 
Sec. 4502(b)(2). If a claimant has executed and submitted a valid 
waiver pursuant to one of the escrows established by the Stripper 
Well Agreement, it has waived its right to file an application for 
Subpart V crude oil refund monies. See Mid-America Dairymen v. 
Herrington, 878 F.2d 1448 (Temp. Emer. Ct. App.), 3 Fed. Energy 
Guidelines 26,617 (1989); In re: Department of Energy Stripper Well 
Exemption Litigation, 707 F. Supp. 1267 (D. Kan.), 3 Fed. Energy 
Guidelines 26,613 (1987).
    As we have stated in prior Decisions, a crude oil refund 
applicant need only submit one application for its share of all 
available crude oil overcharge funds. See, e.g., A. Tarricone, Inc., 
15 DOE 85,495 (1987). A party that has already submitted a claim in 
any other crude oil refund proceeding implemented by the DOE need 
not file another claim. The prior application will be deemed to be 
filed in all crude oil refund proceedings finalized to date.
    The DOE had previously established June 30, 1994 as the final 
deadline for filing an Application for Refund from the crude oil 
funds. See 58 FR 26318 (May 3, 1993). Although that date has passed, 
it has been decided to reopen the crude proceeding. See 59 FR 55656 
(November 8, 1994). The new closing date for this proceeding has 
tentatively been set for June 3, 1996. Id. It is the policy of the 
DOE to pay all crude oil refund claims at the rate of $.0008 per 
gallon. While we anticipate that the applicants that filed their 
claims before June 30, 1988 will receive a supplemental refund 
payment, we will decide in the future whether claimants that filed 
later applications should receive additional refunds. See e.g., 
Seneca Oil Co., 21 DOE 85,327 (1991). Notice of any additional 
amounts available in the future will be published in the Federal 
Register.

C. Crude Oil Application Requirements

    To apply for a crude oil refund, a claimant should submit an 
Application for Refund containing all of the following information.
    (1) Identifying information including the claimant's name, 
current business address, business address during the refund period, 
taxpayer identification number, a statement indicating whether the 
claimant is a corporation, partnership, sole proprietorship, or 
other business entity, the name, title, and telephone number of a 
person to contact for any additional information, and the name and 
address of the person who should receive any refund check.* If the 
applicant operated under more than one name or under a different 
name during the price control period, the applicant should specify 
these names;

    *Under the Privacy Act of 1974, the submission of a social 
security number by an individual applicant is voluntary. An 
applicant that does not wish to submit a social security number must 
submit an employer identification number if one exists. This 
information will be used in processing refund applications, and is 
requested pursuant to our authority under the Petroleum Overcharge 
Distribution and Restitution Act of 1986 and the regulations 
codified at 10 C.F.R. part 205, subpart V. The information may be 
shared with other federal agencies for statistical, auditing, or 
archiving purposes, and with law enforcement agencies when they are 
investigating a potential violation of civil or criminal law. Unless 
an applicant claims confidentiality, this information will be 
available to the public in the Public Reference Room of the Office 
of Hearings and Appeals.
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    (2) If the applicant's firm is owned by another company, or owns 
other companies, a list of those companies' names, addresses, and 
descriptions of their relationship to the applicant's firm;
    (3) A brief description of the claimant's business and the 
manner in which it used the petroleum products listed on its 
application;
    (4) A statement identifying the petroleum products which the 
applicant purchased during the period August 19, 1973 through 
January 27, 1981, an annual schedule displaying the number of 
gallons of each petroleum product purchased during this refund 
period, and the total number of gallons of all petroleum products 
claimed on the refund application;
    (5) An explanation as to how the applicant obtained the above 
mentioned purchase volumes, and, if estimates were used, a 
description of its method of estimation;
    (6) A statement that neither the claimant, its parent firm, 
affiliates, subsidiaries, successors, nor assigns has waived any 
right it may have to receive a crude oil refund (e.g., by having 
executed and submitted a valid waiver accompanying a claim to any of 
the escrow accounts established pursuant to the Stripper Well 
Settlement Agreement);
    (7) A statement that the applicant has not filed any other 
refund application in the Subpart V crude oil refund proceeding;
    (8) If the applicant is not an end-user, was covered by the DOE 
price regulations, or is related to the petroleum industry, a 
showing that the applicant was injured by the alleged crude oil 
overcharges;
    (9) If the applicant is a regulated utility or cooperative, 
certification that it will pass on the entirety of any refund 
received to its customers, will notify its state utility commission, 
other regulatory agency, or membership body of the receipt of any 
refund, and a brief description as to how the refund will be passed 
along;
    (10) The statement listed below signed by the individual 
applicant or responsible official of the company filing the refund 
application:
    I swear (or affirm) that the information contained in this 
application and its attachments is true and correct to the best of 
my knowledge and belief. I understand that anyone who is convicted 
of providing false information to the federal government may be 
subject to a fine, a jail sentence, or both, [[Page 7195]] pursuant 
to 18 U.S.C. 1001. I understand that the information contained in 
this application is subject to public disclosure. I have enclosed a 
duplicate of this entire application which will be placed in the OHA 
Public Reference Room.
    All applications should be either typed or printed and clearly 
labeled ``Application for Crude Oil Refund.'' Each applicant must 
submit an original and one copy of the application. If the applicant 
believes that any of the information in its application is 
confidential and does not wish for this information to be publicly 
disclosed, it must submit an original application, clearly 
designated ``confidential,'' containing the confidential 
information, and two copies of the application with the confidential 
information deleted. All refund applications should be sent to: 
Subpart V Crude Oil Overcharge Refunds, Office of Hearings and 
Appeals, Department of Energy, 1000 Independence Ave., S.W., 
Washington, DC 20585.
    The filing deadline has not yet been set. The DOE has proposed 
that June 3, 1996, will be the final deadline for all applications 
in the crude oil proceeding. See 59 Fed. Reg. 55656 (November 8, 
1994). Notice of the final deadline will appear in the Federal 
Register. Even though an applicant is not required to use any 
specific form for its crude oil refund application, a suggested form 
has been prepared by the OHA and may be obtained by sending a 
written request to the address listed above.

D. Payments to the Federal Government and the States

    Under the terms of the MSRP, we have determined that the 
remaining 80 percent of the Kind and Bridewell funds, plus accrued 
interest, should be disbursed in equal shares to the states and the 
federal government for indirect restitution. 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 which each state will receive is contained in Exhibit H 
of the Stripper Well Settlement Agreement, 6 Fed. Energy Guidelines 
90,509 at 90,687. When disbursed, these funds will be subject to 
the same limitations and reporting requirements as all other crude 
oil monies received by the states under the Stripper Well Settlement 
Agreement.
    It Is Therefore Ordered That:
    (1) Applications for Refund from the crude oil overcharge funds 
remitted by King Petroleum, Inc., et al., and Billy Bridewell, 
William J. Cobb, et al., may now be filed.
    (2) All Applications submitted pursuant to paragraph (1) must be 
filed in duplicate and postmarked no later than June 3, 1996.
    (3) The Director of Special Accounts and Payroll, Office of 
Departmental Accounting and Financial Systems Development, Office of 
the Controller of the Department of Energy shall take all steps 
necessary to transfer $1,245.04, plus all accrued interest, from the 
King subaccount (Account No. 650X00358Z), and $337,022.86, plus all 
accrued interest, from the Bridewell subaccount (Account No. 
6A0C00217Z), for a total of $338,267.90, plus all accrued interest, 
pursuant to Paragraphs (4), (5), and (6) of this Decision.
    (4) The Director of Special Accounts and Payroll shall transfer 
$135,307.16 (plus interest) of the funds obtained pursuant to 
Paragraph (3) above into the subaccount denominated ``Crude 
Tracking-States,'' Number 999DOE003W.
    (5) The Director of Special Accounts and Payroll shall transfer 
$135,307.16 (plus interest) of the funds obtained pursuant to 
Paragraph (3) above into the subaccount denominated ``Crude 
Tracking-Federal,'' Number 999DOE002W.
    (6) The Director of Special Accounts and Payroll shall transfer 
$67,653.58 (plus interest) of the funds obtained pursuant to 
Paragraph (3) above into the subaccount denominated ``Crude 
Tracking-Claimants 4,'' Number 999DOE010Z.

    Dated: February 1, 1995.
George B. Breznay,
Director, Office of Hearings and Appeals.
[FR Doc. 95-3020 Filed 2-6-95; 8:45 am]
BILLING CODE 6450-01-M